The three articles below did it for me. Excerpt from the first article...

China Rethinks Foreign Business Policies:

(A survey of 180 executives by the Urban Land Institute, a non-profit, U.S.-based research group, found that a large share see China as a "must have," says Steve Blank, a senior researcher at the institute. "People say, 'Go get me a piece of China. I'm not interested in the details, just get me a piece.'")

A tale of two factories...a comparison of factories in China and the U.S.... they forget to factor in blackouts, substandard quality, and bribes to local officials.

This article just made a light bulb go up in my head: Four U.S. firms that fought off China.

China is a transition from industrialized to automated ergo it is a place where all industrialized nations outsource their outdated industrialized production until the economics make it necessary to in source almost fully automated production. I remember reading about Benetton about a year ago how instead of going to China they built an $800 million plant in Italy but instead of hundreds of workers it had dozens. I think it was automated knitting and they wanted to keep quality control in house.

Now hypothetically all production is headed that way but until then some place needs to tide the producers over. They will extract as much profit as possible using the old ways until capital investment will make it beneficial in economic terms to switch over. As pressures mount ergo costs rise in all aspects in China from political, wage, raw material, energy, environmental and others, unforeseen competition will spring up.

Also the article on four manufacturers above basically made it completely clear. Those that survived will thrive and perhaps either branch out and multiply/grow or consolidate/grow into larger more efficient entities that are better able to compete. Now they will have supreme advantages in quality control and just in time manufacturing once capital investment into automation goes full force. But their biggest advantage is they will have local oligopolies or monopolies. Imagine there were a few dozen mom and pops making springs in Make Believe City, Virginia (not a real place) and today there are two both are forced to become extremely efficient because they had to compete with China but all of their local competitors are gone. Now the competitive landscape is barren and they became aware that those springs from China are having shipment problems or break after people lay down on the bed. Their orders grow and they must modernize to out compete/satisfy demand etc...

And the cycle goes the other way full force. Maybe someone invests to make a third maker of springs in the area with the latest technology... Countries hurt the most by manufacturing outsourcing will be the most efficient in the next cycle.

The external cost China bears today will weigh so heavily in the future on them that it would overshadow any benefit today: Environmental Valuation & Cost-Benefit News.

I think these are their official estimates: GDP takes on a green hue in new figures.