I wrote an article on this subject for a business publication over 20 years ago. A cop told me then that if he wanted to go crooked, fake goods is what he'd get into, not drugs. There's little risk and huge profit. The problem's worse now, due to the proliferation of dollar stores.
If Chinese manufacturers do get confronted, they show bewilderment (copying is a form of flattery, right?), shut up shop if they have to, move to another building nearby and start up again.
Clearly, this is something to get tough on, so let's make it front and centre in trade deals.