Here's another example of the entertainment industry being stupid: claiming that they lose $244 million from the transfer of certain copyrighted material in China, and then in the same article admitting that the material in question isn't even available commercially in China. How can you lose out on potential sales, when there's no potential for sale?
Yes, the transfers are illegal.
But no, arguing that point with lies is not legal either. The Techdirt article wisely points out, as usual, that the industry would probably be far better off letting this go as they then get freely generated interest for American content that the Chinese public would otherwise not see.
Of course, 'allowing' your copyrighted works to be copied freely would be negligence and could lose the MPAA the right to go after anyone for "copyright theft", so…