Who is going to spend a lot of time and money creating something if others can just copy their product freely without paying them a dime? IP isn't necessary for things that cost little to create but for other things that requires large investment its either IP or a government has to fund the development of those products.
In order to copy the product and start production of the necessary large finances. The Chinese economy received a good boost on this one, but that did not stop the Americans, the Japanese and the Europeans to establish a production there. I don't know what to do with the growing economy of China. I say this to the fact that the absence of copyright law and cheap labor is the key to prosperity in our world.