This article talks about wage advantage for China closing, but it's as much about understanding the whole manufacturing playing field and the myths involved.
1) Any wage benefit will disappear over time, which could be 2 decades (from when panic first hit, i.e. mid-90's)
2) Wage benefit isn't just worker wages - it's tied in with management wages, risk, other real costs
3) The article notes 15% of direct factory labor tied into wages - compared to sales & marketing and other expenses, that's a fairly small portion. And it's risky.
4) Not mentioned - efficiencies of scale can make the Chinese portion more advantageous. Efficiencies of location improves home field advantage.
5) Except we're exporting much of our production - so making a car in Detroit to export to India doesn't make much sense.
6) Most of the problem is with the banks & financial system. While we scream about labor costs, the funneling of money to Wall Street is taking a huge chunk out that should be going back into the system - hurting workers more than lost offshoring wages does.
7) Yes, the US can compete - on some things, if clever, typically a small margin advantage. This isn't the huge steel monopoly anymore - we have to choose battles wisely and continue to innovate. It won't "save the economy" and recover our now-lost-manufacturing prestige - i.e. lots of union people on the assembly line doing mindless work, uh, o-kay... - but it can play a significant portion of high-tech growth.
8) Oh, most of the most polluted cities in the world are in China - while I sympathize, we don't want the pollution back. Fix it or leave it there. Heartless, but better them than us. Prefer to fix it though.