But China wants to make everything, that is the problem. It might also be the case that we misunderstand the state of the Chinese economy quite a bit. I heard an argument by an economist that the situation is mainly explained by the real estate crash. That was a ginormous event but the government basically just denied any big consequences. That did kill the credit market for a long time. Now Chinese consumer have little money to spend and China is forced to export their products, no matter the price to keep things going.
As long as a typical Chinese person is happy with a standard of living that is far below what an American expects, China will be way cheaper on labor.
For most products, labor is a significant cost.
For a lot of consumers, price is more important then where it's made. Maybe not what they say they think is important but when they actually decide. As a result, China will make almost everything, along with the rest of south east Asia.
Basically, the lower price for products comes at the cost of exporting your own jobs. One is easy to reason about when making a purchase decision, the other is indirect and abstract. Which is why the former wins
Well so far I believe they've been buying us government bonds for example?
Also, haven't they been buying all kinds of stuff in Africa etcetera? Money doesn't have to flow from A to B and back to A. It might very well pass many more hops to complete the circle
