Past the steamy noodle stalls and pungent herbal medicines at China Street bazaar, a sleek "Apple II" home computer can be had for one-fifth of its price in the United States.

Keep walking down the musty market lanes and you can find unbelievably low prices for the smartest designer jeans, for French cologne, epicurean brandy, Book-of-the-Month Club favorites, bikinis fit for the Riviera and the best motor oil--all courtesy of the pirates of Taiwan.

The cut-rate goods look and feel like the real thing, right down to the famous labels. Actually, they are just good fakes knocked off by commercial pirates who plunder the world's elite trademarks, patented know-how and copyrights.

If imitation is the highest form of flattery, then Taiwan surely scales the peaks of blarney.

Counterfeiting is so widespread and slick it takes an expert to detect a fraud. Thus consumers gladly lay out at least two-thirds less for names such as Puma, Ronson, Cartier, Head, Johnny Walker Black Label, Kodak, Samsonite, STP, Johnson & Johnson and Westinghouse.

"There isn't a legal pair of Levis in town," snapped U.S. businessman Henry Weiner. "The fakes are so close and the prices so far apart, you'd have to be nuts to buy the real thing."

Weiner ought to know. As local distributor for Revlon products, he has only to make a casual visit to a neighborhood cosmetic counter to ruin his day.

But the real lost treasure lies far beyond the shores of little Taiwan. What makes big foreign firms such as Revlon see red--Weiner calls it "the annual $100 million rip-off"--is piratical exports of the famous frauds made here.

Take the dilemma of Union Carbide's Eveready battery, copied and sent abroad by the millions by no less than seven Taiwan impostors.

"No one in Africa and the Middle East understands counterfeiting," lamented Union Carbide lawyer Paul Hsu. "If a fake Eveready goes bad in an hour, the buyer never buys another one. So my client loses a market share. But if the fake happens to work, we still lose."

Though quality is no hallmark, some counterfeits--clothing, cosmetics made of simple mixtures, books and chemical products described in published patents--are thought to be indistinguishable from the original.

Private investigator David Lo, who chases down pirates for corporate victims, held up two bottles of VO 5 shampoo with a challenge: "Which one is real?"

"The bottle is the same," he replied to his own question. "The smell is the same. They make the same suds. Only your hairdresser can tell."

Lo, however, would be the first to warn against fakes. Stories abound: the woman whose hair fell out after using sham shampoo; the African country that lost a wheat harvest because of phony herbicide; buildings imperiled by counterfeit circuit breakers; watches advertised as waterproof that drown in the first shower.

Even such expensive items as the cloned Apple II computers are less reliable and durable than the true model, according to Apple's salesman here. The fakes can only be used for a couple of hours at a time without risking a meltdown, he said.

Of course, who can demand quality from underground operators working in tiny, makeshift factories or chemical labs? They are said to work hurriedly, producing small orders for their salesmen to offer retailers at discount prices.

When Taiwan's pirates entered the computer age, they added a new and--for foreign firms--dismaying dimension to a cottage industry that has been churning out unsophisticated imitations for decades.

Two years ago, a handful of electronics students working feverishly in a Taipei suburban living room figured out the software of a real Apple II. Once able to recreate the computer brain, they easily began turning out cheap sets by importing components, following circuitry diagrams that come with real Apples and producing a replica of the plastic case and keyboard.

"I think the Japanese started out that way too," said Warren Lo, spokesman for a firm later started by the students.

Now, the Apple II brain can be bought in "kits" for about $200 with simple instructions for assembling a complete set. In Taipei's open-air markets, it is common to see old women squatting in the back of stalls putting together computers that their sons sell up front.

When electronic copycats began taking a sizable bite out of Apple's Asian market, the American firm struck back with a court order seizing several imitations.

But legal experts know the difficulty of rooting out pirates from Taiwan's safe harbor. Laws are weak, if they exist at all. Judges tend to side with "the little guy" against faceless multinational corporations.

Even counterfeiters caught red-handed receive such light sentences that they can convert them into small fines.

Now Taiwan's government, which has encouraged economic development with unfettered capitalism, finally seems ready to pull in its sails a little. After all, it maintains unofficial ties with most nations chiefly through the strength of its trade and favorable investment climate.

A number of laws are being considered to deter piracy and better protect foreign manufacturers. One proposal would set a maximum five-year jail term and $4,000 fine for convicted counterfeiters.

"This piracy is not only illegal but immoral," said Director-General Vincent Siew of the Board of Foreign Trade. "This will ruin our image and reputation. It will be bad for our trade development. When we develop into a developed stage and other countries come to copy our products, what will be our feeling?"

Until new laws go into effect, however, the big name companies seem resigned to the feeling summed up by one of their representatives.

"If you don't get copied in Taiwan," he said, "then it means you're no good."