What can we learn from China's success?

What can we learn from China's success?. A couple of items.  The rapidly rising trade gap due Chinese outsourcing vastly overshadows offshoring of service jobs to India (there is a gap in perception). Second, China currently runs only a slight trade surplus with the rest of the world, which indicates that its currency is fairly valued (although a free float with the dollar should be a precondition of trade). So a big fall in the dollar may not occur even if the currencies floated against each other.

What this means is that China represents a trade threat to America on par with Japan in the eighties.  Competition with Japan proved to be somewhat good for the US.  It provided us with inexpensive, high-quality goods — and — it forced US manufacturers to radically improve their methods (in quality and cost).  Unfortunately, the Chinese threat appears to only provide low cost, high-quality goods.  It doesn't offer any improvement in manufacturing method that the US can match other than low cost labor.  Does anyone else know of any other “secret sauce” in Chinese manufacturing? [John Robb's Weblog]

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