Yes it's true. I have outsourced projects at times when I have more work then I can handle. Their best trick is to double the price we agreed on after taking the work half way. The excuse for that is that the work to be done is more than we estimated even when I clearly explain what I need before the project starts.

Though this is for software. But I know it applies to other type of work.

And yes quality is always an issue. So be careful. It's always better to have American or European company in between

I'm going to have to disagree with you here. I designed a retail product and had it manufactured in China. While there are cultural differences, I didn't have any problems in terms of altering a contract after its signed, or cutting corners. The company and specific representative I dealt with was courteous, fair, and delivered on the promise completely to my expectations. Language is no doubt a barrier (the employees' english is often a few notches down from a native speaker, as expected), but it just required less requests per email, and working in a style that was compatible. Finally, there are some great benefits to working with a Chinese company: low costs, and the time difference. It's really great to be able to start up a late night email correspondence that's right in the middle of their workday.

Seems to me that kind of thing can happen to you in any culture. It's not like business deals in the western world never go awry.