Here's your litmus test:
If both sites exist and users in China overwhelmingly chose the new China based one, doesn't it prove that this new site is providing something that the original did not or could not provide?
There's a massive difference between a competitor and a clone.
In this case, they didn't copy the software. They rewrote it from the ground up with different tools. They did copy almost 100% the look and feel. But that is not 100% of the "product"...far from it.
How closely to a pre-existing design or market space does a product need to be before it offends you? Do you have a methodology to measure this?
How much time have you spent trying to woo venture capital? In my experience, one of the first questions I get hit with is "is there anyone else doing something similar?" If the answer is no, this is a red flag.
A typical and expected elevator pitch is "its like X but for Y". Hybridization is the game here. It is common and quite acceptable to say "its like X but for China".
The creator of this new product did change something...something critical... "its like StackOverflow but for China".
"Derivative", not clone.