The countries surrounding China are very clearly a potential threat to its manufacturing dominance. Especially after it has reached the Lewisian Turning Point, when salaries catch up with average worker productivity.

Fortunately, there are enough niggly-nagglies (infrastructure, education lack, skills, stability, intellectual property rights, legal conflicts, inflation …) about those countries to keep the threat at bay for a while. At the same time we should be wary of slow grinds. Think about the frog in the pan of hot water …

Tip ‘O the Hat to Andrew  (Note that salaries in any given country are directly related to PPP-Adjusted GDP per capita. Strange choice of graph but it gets the disparity issue across.)