I don't like the term "Chinese". It's a huge country, with diverse fabrication houses. Sometimes the expensive, branded thing and the cheap knockoff are from the same production line.
The way it works is some company hires chinese production house for say 8 hours a day to make 100pcs of stuff. This is all made according to their plans, tested and everything. But they probably make a few pieces that won't meet the QC but still could be sold under price. Or, from what I've heard, the entire clothing industry works like this: they make a deal for 8 hours, make that and sell it,but really work for 12 hours, make the exact same stuff but without a brand logo and sell that too, with more profit margin for them.
Made in China is stupid, it can be the best, most reliable product you own and it can be a teddy bear stuffed with asbestos.