China is a great place for design teams. It is not without issues, but a great place.
Chinese culture focuses on diligence, so the wealth of engineering talent is vast. The prices on the very best are achieving some parity with prices in the West, but common design is still a big bargain.
A design team is not so difficult to start here. Without even establishing your own organization here, you can enjoy having your own team by using a local company like ours. Two people can do a lot for you. Not long ago, I developed a 4 person team for a NASDAQ company. They made a near 24 hour ability in combination with the US based R&D team. They further quickly showed breakthrough ability with their different perspective. This made them a key team within several months.
It takes the right people, tools, and oversight, and value will come. Most large MNC’s have invested in and developed teams. Smaller companies or companies with no China presence have lagged, and that should not be. Smaller Western companies should put Chinese engineering resources to more use. They are an underused resource here.