@Buster - you did ask for legal insight into China’s game market. And I believe you did get some solid business direction. You’re not talking to international Chinese companies, nor the international business men and women from that country. Your talking about direct marketing to the Chinese consumer market. And yes, traditional accepted North American business practice is largely unviable in many places in the world, including most of Asia.
A proven successful game approach is to build MMO, lower volume multi-player, and to a lesser extent online only games that you give away, then charge micro-payments for in-game add-ons. Best practice is to use a retail purchasable game card based system (there are several already available to license/use in the region).
If you’re looking for a unified legal definition to use as your base assumption, I believe you’ll be disappointed. China, in particular, is divided (from a “selling to consumers” point of view) into zones. “Business or commerce” zones are the most affluent. Copyright laws do exist, but enforcement is historically lacks. As with doing business with any Asian country, there is also a different acceptable business practice. In many countries, formal “bribs” are not only acceptable, but expected method of interacting both with business and government officials, I believe in China that varies by region. So even if someone grabs your game, goes into formal mass production, and out sells you 1000 to 1, such a practice by a China national may well be “legal” depending on who they are, and what steps they’ve taken locally. Chinese courts would also tend to side with nationals as opposed to a US business or citizen (remember, the US legal system is not the world standard when it comes to treating anyone, regardless of nationality or other factors, as equal under the law… even that gets “fuzzy” in the US some times 
).
That doesn’t mean the market is lost, just that you have to conform to their business environment, not the other way around. It can be daunting, and there are many “cultural” factors to your game localization that may be more painful than the straight translation of your text to Mandarin. One example, although Japanese not Chinese, is the story of Abe’s Odd World… when they went to publish the game in Japan, the Cultural authority (which you will find exists in China as well) rejected the game on the basis that it was culturally insensitive. Turns out old Abe had 4 fingers, which (and I might butcher this story a little here, it’s been a while) is the “mark” or common trait of a Japanese fish cutter, and a mark of … not shame, but something like it. People don’t generally discuss it in polite circles (make sense?). So, the end result is Abe lost another finger Poor guy, as if he didn’t have it rough enough already 
I hope this helps,
Galen