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The part that bothers me is that this discrepancy butts heads with the idea of comparative advantage. Somehow every economy which is heavy on imports has a higher overall cost level than peer economies that are not import dependent (see Hawaii). While in theory some of these import dependent economies are powered by comparative advantage (e.g. pork, and coffee growing in Hawaii) - the dominant term appears to be the imports for the average basket of products.

Is China's cost level lower because a local supply chain inherently more efficient and advantageous than an external supply chain? When does an external supply chain actually make sense? If there are some markets which are winner takes all, then is the economic theory more about "do you make it or do I?" rather than a smooth supply/demand/cost curve with comparative advantage.