[obrajesse]

That's a pretty common pattern. To a first approximation, you will never outcompete clones on cost or distribution. Chinese patents and trademarks are actually helpful if you need to enforce, as are good contracts written by a Chinese lawyer in Chinese.[1]

You can outcompete them on customer service, community, brand, and quality.

For most consumerish products, I would not be worried about a clone stealing your design files. It is incredibly cheap to clone the mechanical parts of a product from photos or a single copy bought retail. For most consumer electronics, the clones would be unlikely to use the expensive western parts and designs you would. Instead, you're likely to see really fascinating cost engineering around parts you didn't know existed.

[1] I have sued a supplier in China, who did some sketchy stuff. It was a fascinating process. Contrary to the conventional wisdom and to our expectations, the court actually helped us get back our tooling and inventory.