a separate brand name would probably leave the name "BMW" along
on the other hand, it makes a lot economical sense since Chinese auto market is becoming THE largest in the world, and most of the purchases would be compact cars or even smaller. Joint venture with a local company would eliminate a lot of political issues, if you know what I mean
Quality would always be "you get what you paid for." It's unfair to ask for higher quality when someone knows that there are higher quality but expensive products, and instead of spending the money, buys somthing off of ebay with a fraction of the cost, and amazingly expecting higher quality... and it just happens that it's made in China.
There are lots of top quality made-in-China products if you're willing to spent the money (hint: iPhone vs other plastic phones)