It doesn't have to imply that developers are lower quality for this to be a troubling signal - if you close an existing office that is doing good work to save money, that shows where your priorities lie. And I agree with your sentiment, I worked with some very talented developers in Shanghai, but there are a lot of factors at play that make it hard to build a solid team from the other side of the world, factors that are legitimate and feed into the misconception that these countries have inferior talent.