"I heard heaps of yelling. I walked on to the balcony and there was a massive fight going on.
"The guy holding the knife was walking towards the cops - that really freaked me out and I called 111," he said.
He said it was the fifth serious assault he had seen outside the Beijing club on Pitt St since he moved into the area five months ago.
"These are not just run-of-the-mill-punch-each-other-in-the-head [fights], they're really bad fights," he said.
The 23-year-old stab victim was last night in stable condition.
Two males, aged 18 and 22, were assisting police with inquiries.
Both weapons used in the fight have been recovered.