"China is notorious for laxness when it comes to IP"
While it would be an understatement to say that China is notorious for laxness when it comes to IP, the issue seems remarkably similar to what we've been hearing on this side of the planet, too. Late in June the internet storm about Kind of Blue/Kind of Bloop exploded, with remixers siding with Baio and photographers with Maisel. Again, you're forced to ask if it was a derivative enough piece of art or not. The remixed picture was a hand-made reproduction of the original with a limited palette using large pixels, not a simple downsample. Is that enough to be considered fair use? Is it transformative? If not, does Shepard Fairey get a pass? Theirry Guetta didn't get one for his graffiti work of Run DMC, but no one's chasing after the estate of Roy Lichtenstein for repainting old comic panels.
See also
http://annlogue.com/2011/07/07/potential-perils-of-doing-business-in-china/
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