Yes, the same rule applies to the Chinese economy, specifically its export zones. The primary advantage Chinese manufacturing has is that its price is artificially depressed by public policy. Chinese workers in the export zones are cheaper because the Chinese currency is artificially held low, the government gives the export zones preferential treatment and overlooks the working conditions in there, and the safety and quality standards are enforced by the buyer only.
The Chinese economy is exploiting the gap between automation and non-Chinese human work. Automation is slowly eating the Chinese export market, but it won't cover it for a while. Machines are expensive, but they are cheaper than locally hiring humans because of running expenses. However, if you have a simple process, large quantities and simple materials, and are prepared to wait somewhat longer, it is cheaper to have things made in China than it is to buy and setup the tooling to make things yourself. This is doubly so if you are doing a short-time, high-volume batch (say a seasonal product), and would have to retool for the following quarter. As machines get cheaper, more versatile and easier to retool, this gap slowly erodes. For VERY small runs, in the hundreds to thousands of units, Chinese factories are no longer interested in these orders. For individual units, in plastic, it is actually cheaper to make them on a home 3d printer than to have them made in China (including the cost of the printer). Within China, the same process takes place, but because of the gap in cost of employment, they can use cheaper, less safe machines with a higher maintenance effort (because humans that maintain machines are cheaper) and flexibly switch between automated and manual processes according to demand. Outside China, this flexibility is much more expensive. So yes, the power law applies, but the power factor is somewhat smaller. The gap between the two will close at some point, but it has not yet.
The Chinese economy is exploiting the gap between automation and non-Chinese human work. Automation is slowly eating the Chinese export market, but it won't cover it for a while. Machines are expensive, but they are cheaper than locally hiring humans because of running expenses. However, if you have a simple process, large quantities and simple materials, and are prepared to wait somewhat longer, it is cheaper to have things made in China than it is to buy and setup the tooling to make things yourself. This is doubly so if you are doing a short-time, high-volume batch (say a seasonal product), and would have to retool for the following quarter. As machines get cheaper, more versatile and easier to retool, this gap slowly erodes. For VERY small runs, in the hundreds to thousands of units, Chinese factories are no longer interested in these orders. For individual units, in plastic, it is actually cheaper to make them on a home 3d printer than to have them made in China (including the cost of the printer). Within China, the same process takes place, but because of the gap in cost of employment, they can use cheaper, less safe machines with a higher maintenance effort (because humans that maintain machines are cheaper) and flexibly switch between automated and manual processes according to demand. Outside China, this flexibility is much more expensive. So yes, the power law applies, but the power factor is somewhat smaller. The gap between the two will close at some point, but it has not yet.