There is strong competition in the travel and tourism business in China. There are many reputable and ethical agencies, and there's the others. It's worth remembering that if an operator is offering a trip which seems amazingly cheap, then the difference will be collected some other way. Sometimes guides and drivers will pay the agency for the right to guide the visitor, ("buying" travelers), and they will then find ways to recover this from the visitors. Sometimes the agency will use non-accredited suppliers, for example for river boats, rather than those which meet the government standard.
A good agency, such as China Highlights (CHT), does not collect the 'per head' fee, and pay their guides a fixed monthly salary, which recognizes the fact that they are English graduates as well as expert guides. These days the guides expect a good salary as more and more foreign businesses open in China, offering an attractive alternative, and a guide with a good standard of English does not have to 'buy' customers from an Agency.
A good agency does not permit its guides takes their on endless shopping excursions to factory shops. CHT allows it's guides to take it's customers to one "interesting” factory shop per day. This allows the guides to supplement their income through commissions. CHT gets no commissions from these shops but the quality and authenticity of the products is guaranteed.
A good agency believes in delivering value for money, reliable quality, and clarity about what people will get for their money. It will charge a reasonable price, and pay its own staff and suppliers at a reasonable rate.
This, of course, raises the thorny issue of tipping. China has not previously had a "tipping culture" however the practice of tipping guides and drivers has become common practice. Even though CHT pays our guides and drivers a fair salary, they still expect a tip if they provide good service. We provide a guide to the level of tips but in the end it is the decision of the traveler.