The term is derived from the fact that many large companies send their manufacturing work over to China, to get extremely cheap labour.
Typically employed in workplaces where an "extra duties" or "extra hours" clause is present in employee's contracts, requiring them to work sporadic additional hours without additional pay.
Fairly common, but goes unnoticed when salaries are not increased over the years.
Worker 2: Didn't you know? He's on a China Salary.