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The problem with the above scenario is low local prices with a trade deficit constantly puts downward pressure on purchasing power. It drains money from the economy. Short term it's great for cheap goods but as everyone is tired of hearing but is happening, we are all headed to the lowest common denominator. Jobs have already gone overseas, formerly very well paying jobs are now only moderately paying and service jobs? Forget it, you're poor.
Unless China starts freeing up its economy and playing by the rest of the developed world's rules we will be facing income inequality and poverty much like a third world country in order to compete with them on their level. We're already there in terms of income inequality. We're just starting to see the downward push in lower bracket earning levels. Not a real downward move just 30 years of stagnation in the face of inflation. So yeah we're heading there.
Also, Prodigit a 1996 Corvette is still safer than a Chinese car of today.
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