Every product has two markets in China: a "foreign/local" market that is characterized by high price and high technology, and a purely "local" market that is characterized by low price and low technology. The best of the Chinese companies compete with the best companies from around the world in the foreign/local market, while the local market is served almost exclusively by local Chinese companies.

The existence of a large local market in China that meets the needs of the 900 million people who have an average annual per capita income of $700 makes China a breeding ground for future competition. As the China economy continues to grow, both the foreign/local and local markets will share in that growth, providing opportunities even for companies with relatively low levels of quality and technology.

Companies that would otherwise go out of business in developed markets with more uniform price, quality and technology standards live to fight another day in China. Simply put, no matter how low the quality or technology level, you can sell your product somewhere in China if it's cheap enough.