One client of mine designed women’s clothing. Her Chinese factory was scheduled to begin production, and she came to China to supervise quality control. Before going to the factory, as was her practice, she used to visit local Chinese boutiques. She was shocked to find her designs being sold in some boutiques under a different label. In fact, this was so common (and China was perceived to be so poor), that many companies haven’t even cared so long as the sales remained in China and under a different label. Of course, the risk for counterfeits, and sub-standard products all being exported to your markets remain. So even a company with no presence in China should have concerns (which can be addressed) with proper auditing. Furthermore, don't underestimate the size and wealth of the Chinese marketplace, nor the technical abilities of their factories. They have the money and expertise to buy and sell whatever can be bought and sold.
Such issues are discussed below.