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If you talk to anyone who has done business in China, they'll tell you that China is a long way from competing with modern Western countries in most respects. Their underlying business culture is so backward that they don't even have some of the most rudimentary things that are needed for a sound business climate.
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China reminds me of what happened to Japan in the late 1980's. Back then everyone was predicting that Japan would overtake the USA as the premier world economy. Japan's banks were the biggest in the world, Japanese cars overtook ours, the Yen shot up from $1 to 250 to $1 to 100, and their chip industry was so competitive that the USA had to literally beg the government to FORM an industry consortium called SEMATEC to counter the Japanese Semiconductor invasion.
Back then, everyone was clamoring Reagan to follow the Japanese model --- They had MITI, which essentially helped to pick and choose which industry to support with tax dollars. One of the project was the 5th Generation project to create a supersmart supercomputer that understands artificial intelligence. Stanford Professor, Feigenbaum predicted the demise of American technological supremacy.
The last straw was when the Japs bought an American Icon -- the ROCKFELLER CENTER in New York.
What people did not realize was that Japanese Banks were loaning left and right like crazy without considering the underlying feasibility of businesses they were loaning to. The Japs were buying up real estate all over the world like crazy.
Come 1990 and the party ended. The Nikkei crashed from an index of 39000 to 13000 today and has not recovered for 15 years. Japan has been mired in a deflationary recession for over a decade, they had to sell their properties at a loss ( Rockfeller bought back his center for half what he sold it for ), the 5th generation project went nowhere, and the US is still the dominant computer standard maker of the world. As for the US government sponsored SEMATEC consortium to counter the Japs, hey --- IT WENT NOWHERE AND FOLDED LIKE A CHEAP CAMERA.
Why am I reminding everyone of history ? Simple --- REALIZE THIS --- CHINA IS STILL A SOCIALISTIC COUNTRY WITH AN AUTHORITARIAN GOVERNMENT THAT OWNS THEIR BIGGEST BANKS and SUBSIDIZES THEIR BIGGEST INDUSTRIES, OFTEN DOLING OUT FAVORS TO CRONIES AND FRIENDS. NEPOTISM IS RAMPANT.
OVER 45% OF THEIR BANK LOANS ARE NON-PERFORMING, and a day of reckoning will have to come !
Unless China gets her financial act together, history will repeat itself.
"He who does not learn from history is condemned to repeat it" -- George Santayana
Reminds me of a story from the Winter Olympics back in 1992, when Japan's Midori Ito was favored to win the gold medal in womens' figure skating. One of the American television commentators asked a fellow commentator if he thought Ito would win the gold, thereby contributing to Japan's continued rise against the U.S. in many areas of life.
"No," said the other guy, "I think Japan will never dominate the U.S. because our Japanese will always be better than their Japanese."
Japanese-American Kristi Yamaguchi won the gold medal.
"..reminds me of what happened to Japan in the late 1980's.."
Exactly. And what went up had to come down... But not to its original level. Look how many cars, electronics, etc, they still supply to us today.
ALL the work in our country won't be outsourced, but some significant chunk will. And some significant chunk of that will never come back.