The question is, would the Chinese firm have been willing to work so cheaply had he not been funneling them confidential information. There could easily be ulterior motives here, it depends on the company in question.
It was wrong to subvert security protocols, but this employee was genius if he could spend 1/5 of salary to outsource his job with no one noticing any change in the level of the code being delivered.
There are literally hundreds of companies that should hire this individual to manage an entire team of outsourced developers.
I read it differently. I don't see any proof that he has any particular talent for managing entire teams of outsourced developers, but rather that he was being paid 4/5 too much for work easy and unimportant enough that he seemingly never had to communicate about it much with anybody besides his employee.
Yeah, but who picked the outsourced company? I wouldn't have fired him, but have him do the outsourcing, and see if he can make it work for the entire department.
Plus, just allowing access to code and having them deliver it isn't the end. You need to be involved in Quality Management (code reviews, testing, etc.) to make sure they are doing a job to your standards (or better!) That stuff takes time and it looks like he was managing it well if he was getting good reviews.
Had it have been a app developer no doubt he'd have got a promotion