&#62;They can always move those factories to India or Eastern Europe.<p>I think there is a popular misconception that most companies prefer China simple because they are cheap and you can easily replace them with x country which also has cheap labor.<p>There are several advantage of doing business in China besides cheap (skilled) labor. They have better infrastructure than most third world country with cheap labor I can think of. I don't know much about eastern Europe and what it bring to the table besides cheap labor. But from my experience I can tell you India (or any south-east asian country) is not an alternative to the manufacturing goods produced in China.<p>There is some kind of international trade pact (no reference handy at the moment) that forces most western nations to divide imports of manufactured goods from third world countries. If this was not the case - I have little doubt that most western countries would have relied on China, even more than it already does. Perhaps exclusively.