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I co-hosted an English language music show on Beijing TV
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David, you are indeed a man of many talents!
It was interesting to read your description of modern Chinese life. As Chinese leader Deng Xiaoping said a few decades ago, "To get rich is glorious." It's not about communism any more.
To answer Enzie's question: the training these artists get is technically very good. In China "modern art" was viewed as western bourgeois corruption and was shunned. (Too bad that didn't happen here!) Chinese artists were trained by Russian masters instead, and now have some of the best skills in the world.
I'm not sure there's anything we can do about this sort of copying of the work of living artists, though. Microsoft hasn't been able to put much of a dent in the particular brand of "Chinese copyists" that they fight with every year. I don't think a lone American artist will have much better results.
As to the impact this will have on professional portrait artists in the U.S.... I like to think it's a bit like the automotive industry. If Hyundai produces some terrific new low priced cars and sells a lot of them, will that have much of an impact on sales of Mercedes Benzes? It's a different target market, and people choose what to buy for very different reasons.
But, really, who knows what effect this will have? The American clothing and furniture industries certainly went through a lot of upheaval when overseas suppliers came into play.