That's actually a very common and inaccurate misconception there Lint, that China doesn't enforce foreign IP laws. In the west, you go directly to jail do not pass go. In China you receive the frigging death penalty.
Just google china "intellectual property" "death sentence".
Here's one just from two days ago
http://www.informationliberation.com/?id=34972
Every month more and more people are sentenced to death for violation of foreign IP. There's a reason why big companies may choose NOT to press cases against Chinese IP violations......... can you imagine pursuing an execution for someone who makes a dodgy knock off Optimus or Bumblebee toy? That's not good corporate PR if it makes the media.