The principle is excellent, but the concept of protecting your product with patents is entirely invalid since about 2001 when China was admitted into the WTO. I have personal knowledge of several, and I can't count the number of times I've read about businesses ruined or seriously damaged by China pumping out knockoffs, sometimes literally faster than the original product gets to market.
The concepts of quality and respecting intellectual property are literally foreign concepts to the Chinese.
It is quite simple: if your idea can be easily copied, the Chinese will do it very quickly. Your "valuable" set of patents is merely a ticket to a series of lawsuits, which China will ignore, and the business, even if you get a judgement years in the future, will simply dissolve and re-organize.
So, any idea that is protected by IP laws but merely injection-molded in plastic is, in a very real sense equivalent to public domain (regardless of your patent status). If you have a more complex (e.g., machined or chemically complex) product, do NOT have it manufactured in China, as you'll soon find copies sold out the back door and competitors setup selling your design even if you can stop the leaks.
To have the moat described in #3, you need some 'secret sauce', and you need to keep it secret.