"Chinese labor is competing and slaughtering the US machines." Sure, on the things that humans do better than robots, like sewing chumbies. My understanding

"Chinese labor is competing and slaughtering the US machines." Sure, on the things that humans do better than robots, like sewing chumbies. My understanding is that china imports a whole lot of manufactured parts (computer chips, etc..) does the final assembly step (the one where humans can compete with machines) and exports the result. Some people say that much of our trade imbalance with china should be re-assigned to other countries that sell the chips to china, where they are assembled into a final product and sold to the US. For example, I'm typing this on a Lenovo brand thinkpad; It was Assembled in China by a Chinese company. But, the CPU is made by intel (and nearly all Intel fabs are in the first world, many of them in the US.) and the ram and SSD is made in Korea. The LCD was also made in Korea. I haven't taken apart the battery assembly (which was assembled in china) but it would not surprise me at all if the Lithium Ion cells and the controller chips were made in Japan. It seems to me, then, that most of what I paid for my Lenovo was not actually being paid to China; China was just the cheapest place to aggregate and assemble all the components. As time goes on, there will be more and more things a machine can do better than a human can; that is why I don't think it's a problem for the US that china has dramatically lower prices for rote labour. You can't get a high school student to hand-craft a microchip, no matter how hard you work them. The other thing about China is that there is a huge gap between unskilled work and skilled work. Much larger than here. I mean, here, there is maybe a 10x-20x (give or take) difference between the hourly rates of our lowest-skilled workers and our highest skilled workers (I mean, if you discount managers.) In China, this difference is much greater; The very skilled workers are paid at almost 1/3-1/2 global parity. I'm helping a Chinese friend set up a hosting company in China, and he tells me that he's going to need to pay close to the equivalent of USD$40K a year for a good software engineer. (I mean, someone with a masters or better.) I mean, that's a lot less than US rates, but it's not pennies. Hell, It's slightly more than I paid myself last year.