I agree. Look at the audio recording business and video piracy. No matter what was said or threats made, the Chinese ignored it all and did what they wanted.
My advice is to keep tight control of your new technology and then make it available to the Chinese under a licensing agreement. That way you might get a little return from China for your efforts.
Just my opinion.
Someone on here mentioned recently that this is a cultural difference between our countries, caused by the Chinese Communist culture. That makes sense to me.
Perhaps, as China evolves into a design industry as well as manufacturing, that culture will change. Or perhaps another way to put it might be, either they change their attitudes of disregard for IP rights, or they'll not evolve as they otherwise would. People won't struggle to develop new product ideas if they're consistently ripped off, eh?
I believe that sharing information is an Asian practice dating back many millenia. When you look at the ideas that Europe barrowed from China over the last 400 years, I am not sure that we in the west have much to criticize, based upon our past behavior.
Just a thought.
Money talks in China. They are many hundreds of millions of hard workers there. It seems they would rather build and compete than play the monopoly game. This tends to spread the wealth, rather than concentrate it in the top 1% as in the U.S. by government policy. Don't worry, their 1% is doing very well thank you.
The counterfeiting is not just copying. There are lots of cases of relabeling parts. A case I ran into is remarking parts from lower power to higher power. You could not see this on a transistor tester. We found it by milling off the plastic and looking at the reduced die size.
Similar issues are relabeling industrial temperature range to extended temperature range.