For the 30 years since the beginning of China’s economic reforms, Chinese industry has achieved impressive efficiency gains by adopting new technologies and realizing economies of scale, leading to a huge expansion in locally made products suitable for export. While an appreciating currency might eventually drive labor-intensive manufacturers out of business, if Japan’s economic history is any guide, they are likely to be replaced by producers of things like ships, machine tools, semiconductors, and doubtless new products yet to be invented.