Hi there,
I was bit confused as to why the chinese version of arduino boards are cheaper than the normal ones. Can anyone tell me the downside of using those versions? I heard that they use different USB port, does it affect the way it is coded i.e. the arduino IDE?
They are cheaper because they use different components (you already know sbout the usb; possibly more light weight voltage regulator in which case you have less regulated power available for 'peripherals') and leave components out (e.g the real Uno has a driver IC to drive the LED on pin 13; in a clone the LED probaly is connected directly to pin 13).
The software functionality is the same. No experience with them so can't tell you if need anything special for communication.
They are code compatible.
The drivers are different - the thing your computer sees is the USB-serial adapter, so that's what you need drivers for. Usually they use the CH340G.
Since they usually use a CH340G (or some other cheap USB serial adapter) in place of the 16u2, you can't reprogram the 16u2, which is occasionally done for exotic use cases involving doing weird stuff over USB. 99.9% of users don't touch this though - the 16u2 would have been a great idea if they'd made it easier to take advantage of - but they didn't.
The build quality is lower - there's a slightly higher incidence of hardware problems.
Most of the difference in price, though, is because they don't contribute any money to Arduino.cc to support the project (note - many "official" boards are sold by the fake/rogue arduino, arduino.org - these ofc don't help fund the real arduino - there's much discussion about this mess elsewhere)
The voltage regulators are typically similar; the official Uno has a lousy regulator too :-/
I think most full-size clones do the pin 13 LED correctly, because they've copied the power switching section (which is dubious on a number of levels), which normally uses a dual opamp, and the other channel is used to buffer pin 13 for the LED.
DrAzzy, I don't know if a Spsrkfun Redboard is considered a clone (in the negative sense); definitely not an original 
It definitely does not have the opamp and the usb circuit is different.
IMO, the RedBoard is one of the best. It starts from the UNO but with some SparkFun improvements. It is all SMD with nothing on he bottom to get snagged. SparkFun does send money to Arduino.c and does not infringe on the Arduino trademark. The made-in-USA manufacturing is topnotch and the price is OK. I have several of them in my projects.
For newer projects I have switched over to the Arduino.cc Zero, but just recently SparkFun released their SAMD21 board and it delivers more RAM and everything else I want except EDBG support.
I have several Arduino China clones: 3 Uno R3, 2 MEGA 2560 R3, 3 Nano 3.0 and also 5 AtTiny85.
The Uno and the Mega 2560 were delivered ready-to-use. The Nano and the AtTiny85 came with unsoldered pin connector rows (which is an advantage, for I can decide whether to use them upside or downside). I've also got some other communication modules, shields and sensors from China.
All modules are working (provided that you install the right USB driver for the Arduinos).
The manufacturing quality is ok, sometimes some pins or connectors are bent a little, but nothing serious. I only had once had a module (an acceleration sensor) where an SMD pin of the sensor chip had a cold joint but I could fix that. Another thing I experienced is that modules can have wrong pin labellings which can grow you some grey hair (I described one here: Problems with your Serial1 on a MEGA 2560 China clone? - Installation & Troubleshooting - Arduino Forum).
But all in all my experience with the stuff is very good.
So why are they so cheap? I think that on the one hand all used components are mass-products. You find the same cheap chips, connectors, LEDs and other components on all different modules. This also induces some quality assurance. And actually the modules don't contain many components. The Arduinos as well as other modules themself are also mass produced in China. One Chinese online shop e.g. today had almost 1 Mio Arduino Nano for $1.95 in stock. With these huge production amounts and actually no development efforts such prices are possible.
One disadvantage, if you order directly in China, is that you need to be patient. Delivery times are 4-8 weeks. Another thing is, that you get no support and no documentation. If something doesn't work like it is supposed to (which doesn't mean that there is a defect!), you have to search the internet for possibly matching datasheets and docs, which are often very bad translated from a chinese original.
So, the risk for sourcing modules from China is rather small considering the low prices.
Of course there is still the issue with the personal remorse for buying clones instead of the original but this is another discussion...
DrAzzy:
The build quality is lower - there's a slightly higher incidence of hardware problems.
The "slightly" got my attention. Sometimes there is a whole batch on Ebay that has a wrong pcb for the I2C signals (not connected). There are even still Nano clones today on Ebay with counterfeit FTDI chips, they come with lots of trouble included. The cheapest crystals will stop working below 0 degrees Celsius, some have bad soldering, and so on.
For your final project, you better buy good quality.