You'll be surprised how many little tricks and small innovations are in "extremely basic tools".
http://vintagemachinery.org/mfgindex/detail.aspx?id=10714
"In 1970 Adelaide, Australia engineer Harold Clisby patented a novel lathe design that made use of aluminum and other metal extrusions. Clever techniques provided surprisingly good accuracy for such a low-cost production method. He made a modest number of machines and accessories himself.
In 1972 Melbourne engineer Ron Sher began production of what he called the "Sherline" lathe in Australia, as Ronald Sher Pty. Ltd. In 1973 Joe Martin of Martin Enterprises in San Marcos, CA, began importing the Sherline lathe to the USA. In 1974 Martin began manufacturing the Sherline lathe in California USA. In about 1979 the lathe business was separated off as Sherline Products, Inc."
The 1970's patents are long expired but the point is to show there's actually innovation in there despite the obvious simplicity.
I'm sure China could independently come up with better designs. But they do often just copy. Because it's easier. So "needs to steal knowledge" for simple designs/products? No. Steals? I mean you can buy Chinese literal copies of anything.
The Chinese are obviously very capable and pretty much everything and anything other than some very specialized bits are made in China. They got there partly via copying and pretty lax to non-existent IP protection. The Japanese did that before them. There are other aspects of how they compete which are possibly questionable (like poorer working conditions, environmental laws, etc.) Can't say anything specific about Sherline here but it's very hard for a western company to compete with China. Here is what Gemini says on this topic:
"Yes, Chinese manufacturers do produce machines that are widely recognized as direct clones of Sherline's precision lathes, mills, and small CNC setups. The most prominent example is Xendoll (Xendoll Tools), which manufactures a line of desktop and micro machine tools. Their manual lathes, mills, and CNC kits visually and functionally mimic Sherline’s classic designs. Target Market: These Chinese copies are marketed heavily toward education, STEM programs, hobbyists, and DIY makers. Design & Features: They replicate the compact footprint and modular configurations that made Sherline a staple for micro-machining small metal and plastic parts. The influx of these lower-cost overseas clones and cheap desktop CNC imports has heavily impacted the American micro-machining market. Under severe financial pressure from these imports, rising domestic manufacturing costs, and shifting hobbyist trends like the widespread adoption of 3D printing, Sherline announced in mid-September 2026 that it is winding down all US manufacturing. After 52 years in business, the company is expected to close its doors entirely by the end of 2026. While the Chinese copies provide a cheaper entry point for beginners, the machining community frequently points out the intellectual property implications of directly copying a storied American brand's legacy designs."