There's a good article in Business Week about fighting piracy, specifically in China. The author correctly makes note of several factors contributing to the problem.
1. Disposable income - it's growing, but not there yet. People are willing to save to buy expensive, real goods (luxury items), but if they are priced too far beyond reach, they'll go for the fake alternative.
2. Value-adds. This is going to be one of the biggest problems in an age where ones and zeroes can be copied and distributed relatively easily. If there's no real benefit to buying your legitimate product, I'm going for the pirated DVD...odds are also that the pirated DVD is region-free, meaning you can play it anywhere in the world, not just the "region" you bought it in. Dropping the regional DVD coding system altogether would also be considered a "value-add", though it obviously has a function (to prevent leaks to other countries if releases are scheduled for different dates, for example).
3. Recognize that not all piracy is the same. There are different reasons for purchasing a fake Prada bag as opposed to a pirated DVD, as opposed to pirated software. Any one-size-fits-all solutions will be counterproductive.
I found the link via Silicon Hutong, which also has some good commentary on the article.