To be clear, there’s more to this, but I’ll let somebody else cover the economics and history side of your question and stick to what I’m familiar with.
While Chinese goods can be good quality, it is difficult to know ahead of time what suppliers will be reliable unless you have an existing relationship with them. There’s very little regulation on how Chinese goods are advertised overseas, so you really have no idea what you’re getting. Maybe it’s quality parts on the cheap, maybe it’s literal garbage for the price of a genuine product.
The result is that unless you’re willing to shop around and test products that you probably can’t refund, you will often get screwed, and for many use cases this shopping around phase totally offsets any money you might save going Chinese.
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