This news is so old I put it in the category of fake news. Let's move on, there is nothing new here.
What should be of more concern is CASA giving them such a hard time they're likely to pull up stumps and move the whole shebang to Canada. The trainees will never exercise the privileges of their Australian license once they go back to China. They just get a CAAC license, a type rating on an Airbus, or Boeing or Embraer, and then they get captured in the recurrent company training system.
And yes, to declare my slight conflict of interest I have just finished a 3 year contract with China Southern as a TRI in China. They treated me very well and are a great bunch of people to work with. China Southern has nothing to do with CAE any more, and it's been like that for more than 6 months now.