My two cents...
Ni hao!
This article is possible if the U.S. and europe keep giving away our knowledge and experience. I went to China in Oct of 07. The chinese manufacturing and technology advancement is dependent on outside help. They are however the masters of copying. They can copy anything, even from a picture in some cases. Where they lack is in understanding the quality that is required for U.S. and european markets. This is where the problem can occur, U.S. and european companies give the knowledge of perfecting the product for sale into these markets. Keep in mind that industrial espeonage, trademark and patent infringement is rampant in China (this is do to a lack of the feeling of personal ownership of anything). Once the information is passed onto one source in China it is generally a matter of time before it is everywhere.
How do we compete with this? Chinese companies are not interested in exporting smaller manufactured items. They want every export to be huge "how many containers a week/month?". They have the "Wal mart" and "Home Depot" taste in their mouth and think everyone in the U.S. is like this. Small or specialty manufacturers are reasonably safe. It is also generally cost/time prohibitive to export materials only available in the U.S. to China for the less expensive manufacturing and ship back. These items are also reasonably safe. The U.S. and european manufacturers were simply priced out of the market on low quality/price products by China. If the technology and quality sectors keep their knowledge here this will also slow China's ability to grow. Service, retail and distribution are safe as long as their is money in american pockets to spend on it.
Capitalism has infected their entire culture and slowly limiting communisms ability to maintain power. You can see in the people the difference in the older generations raised under communist strong hold, the middle aged generation adjusting to capitalism and the younger generations that have fully embraced it. China has a problem...the people like money. They have instated minimum wage standards in some areas, unskilled labor is getting more difficult to find, housing has more requirements, and more cars on the road. Just look at Taiwan, Hong Kong, Japan, and Korea as examples. The rest of the world has started putting pressure on China to allow its exchange/interest rates to fluctuate more naturally. This causes a problem when the U.S. dollar is going down, RMB/yuan goes up and the "cheap" prices are no longer such a great deal. If China were to experience the same requirements in environmental and safety concerns as the U.S. and european companies are held to this gap in costs would become even more narrow. Manufacturing is coming back on some items, slowly, but still coming back.
China is also kept in check by a major competitor, India with 1.1 billion people to China's 1.3 billion. There are also the other surrounding smaller competitors like S. Korea, Viatnam, Taiwan, and Malaysia. North Korea has also takin note of China's success and has opened small controlled economic zones allowing foreign investment in southern North Korea.
I speak some spanish (very rusty) and started to learn some mandarin for my trip. What I found is that the younger generations are taking up to 10yrs in some cases of schooling in english. First to be able to get a higher paying job, and second in hopes of being hired by a foriegn company and one day being able to leave China.
Xie xie