First off, I don't doubt that China engages in large-scale industrial espionage, or at least used to. Nowadays they have plenty of talented and highly educated engineering talent of their own.
Second, I now actually read the article. It describes plenty of questionable and problematic things but also contradicts your claims explicitly.
The essential point of the article is about making money by selling access to Claude cheaply in China. Not about Chinese labs orchestrating a way to get their hands on Claude output.
Your credit card claim is considerably weaker in the article: "[Beyond this there are] accounts purchased using stolen or fraudulent credit cards [...]. How large this share is relative to the above four “innocent” tactics is difficult to verify, but the two markets likely share some infrastructure and personnel.". Instead, swapping models to cheaper alternatives is listed as a major reason for cheaper prices.
Then the article gets a key point wrong: As many others have pointed out to you, you don't get access to the reasoning traces anymore on the subscription accounts. And the article also clearly states:
"Chinese developer communities assert [selling logs] is happening in at least some cases, but whether proxy operators are systematically harvesting and selling these logs, and to whom, remains unverified. However, downstream distillation data does exist on the open web. Several datasets of Claude Opus 4.6 reasoning outputs circulate on HuggingFace with no clear source for the outputs. Theoretically, one can clean and sell similar distilled datasets to other model developers in China."
The article also discusses selling logs for other (far worse!) purposes than for training, like blackmail.
So overall this article reads very, very different to your claims. Nothing in the article suggests or supports the idea of large-scale coordinated "distillation attacks". Instead it paints the picture of a naturally emerging grey-market response to access control blocks, consisting of many exchangeable individual actors: "Almost no one operates the full chain. Most participants own one or two links and monetise those well, resulting in a resilient, modular system."
Importantly: Nothing in any of this looks ethically worse to me than Meta using pirated books for training. And nothing suggests that OpenAI or Anthropic were more ethical than Meta when sourcing their material.