"There is a lot of raw power in the development of these bandit phones that could be channeled into normal, productive creativity from the bottom up."
The key is that this energy or power is channeled into normal, productive creativity instead of just illegally copying of ideas and products. There is still a long way to go.
If you have ever read "Rivertown" by Peter Hessler, a great read about life in China, then you might remember his referencing of Shanzhai culture in Chinese society starting on page 258.
The demand for Nalgene-knockoff bottles was much more understandable, especially in a tea-drinking city like Chengdu, where the bottles spread quickly throughout the city's social strata. They were first acquired by cab drivers, who tended to be at the forefront of such trends - cabbies had a certain maverick quality, as well as plenty of money. After that, the businessmen followed suit, and then xiaojies, and finally by summer even the old people in the teahouses were sipping their tea out of fake Nalgene bottles. Soon you could buy them for twenty yuan in any Sichuan city or town.
The bottles came with a label that described them as American-developed Taikong Pingzi - Outer Space Bottles. But they were clearly the product of Chinese factories, because they weren't quite standard and often the label was misspelled. In that regard things hadn't changed greatly from the seventeenth century, when a Spanish priest named Domingo Navarrete described the business methods in China. "The Chinese are very ingenious at imitation," he wrote. "They have imitated to perfection whatsoever they have seen brought out of Europe. In the Province of Canton (Guangdong) they have counterfeited several things so exactly, that they sell them Inland for Goods brought out from Europe."
The amazing thing about this Shanzhai trend is how much of the global market it entails. Out of the 1.15 billion cell phones sold worldwide in 2007 over 150 million of those were Shanzhai. Thats over 10% of worldwide sales and that data was the officially reported amount from the Chinese government (so it could be even higher.) And this is only one area of the "Chinese bandits" work... cell phones.