In the case of Tomato Garden they reported Hong Lei to the authorities who arrested and imprisoned him for three and a half years along with lesser sentences for his associates. But it seems to hinge on whether the theft has made any money.

http://www.chinaipmagazine.com/en/journal-show.asp?id=429 http://www.gomyhosting.com/windows/html/managedhosting/505.h...

What would be interesting would be the brief that Microsoft China gave to the sub-contractor. Did they encourage the copyright infringement?