They probably "borrow" the engineering. They also have close to 0 cost for the customer support ('cause they offer none) and the employee wages are way lower than RME / Benchmark / Okto / UAD / MOTU / etc. You'd pay Porsche money on a Yugo when buying an 1k$ SMSL.
Your points are well taken, I just try and keep the made in China sold direct on line to the free world comments out of the mix, as one tends to start a political fire with those, and I have been roasted on other forums for my somewhat free-world leaning POV.
Of course many top brands, including audio, have taken production to China in order to financially compete and survive, though they are based in, have employees in, and design their products in the U.S. or Europe. Many companies examine, "borrow" or emulate to a degree other's technology, much of which is quite legal, and it is well known that some manufacturers, particularly in China (not just audio) clearly violate or work without concern for intellectual property rights, which is illegal and repugnant, but most difficult to legally defend against.
As to Topping, from my study of them, which is not superficial, it is clear from their and others' information, data and websites that they possess very high-quality engineering talent and utilize the best measuring and evaluation equipment in their production. I do not see them infringing on others IP. Their internal skill sets enable them to create state of the art products. They are a legitimate Chinese-based and run company that fully utilizes and leverages its location, costs therein and economies of scale to produce very high performing products and sell them at a significant discount vs. free-world products.
It seems to me that Schiit Audio is the only free-world company that can even come close to competing in cost and performance and produce in the U.S.
Such is the world we live in and the consumer must make his or her own choices on whose products they wish to purchase and why. Most make that choice with their wallet.