This is a common misconception. It is true that they don't think it is theft once it's widely available (even in underground community), but it's not because "copying is acknowledge of something's quality". This is one of the usual excuses.

A better phrasing would be: modern (post-1980s) Chinese people [1] care more about who is able to build the thing, not who is able to invent / design. They happily (and knowingly) steal your design and after a few iterations build it better and think it's totally legit because you failed to prevent them from stealing your design and you also can't build it better.

And the annoying part is, turns out, after copying all they can steal they surprisingly can invent, too.

[1] It's not yet a culture

So if I steal your wallet, your phone or your car that's theft because you no longer have access to it and I do.

If I copy a book, a CD, a DVD, a document or a chip the original owner still has it. That doesn't mean there's no prejudice or that it's legal but it's not theft.