Well, if MS manages to really come up with an unbreakable copy protection scheme or persuade Chinese government to clean up the piracy completely, what would happen? People in China cannot afford to pay hundreds of dollars for an operating system, so they would be forced to use a cheaper alternative. It could be Linux or it could be a brand new Chinese OS, but in the end there would be a very large global market for one of these operating systems. In the end, it would find its way into low cost computers in the West, as well. No wonder MS looks the other way.
Poor people will not bring you any more revenue, so why would you force them to come up with a competitor guaranteed to have a huge market share? I bet MS is concerned with piracy of its products by the people who could afford it, so it tries to make it difficult, but does not make it completely impossible. They have thousands of engineers; I am pretty sure they could come up with an unbreakable method if they really wanted to.
Poor people will not bring you any more revenue, so why would you force them to come up with a competitor guaranteed to have a huge market share? I bet MS is concerned with piracy of its products by the people who could afford it, so it tries to make it difficult, but does not make it completely impossible. They have thousands of engineers; I am pretty sure they could come up with an unbreakable method if they really wanted to.