This is precisely how it works. What you’re missing is some good old fashioned accounting trickery called externalizing costs. Basically, you externalize the costs associated with shipping your raw materials crap across the ocean and finished goods back. In short, the only cost of goods sold is your raw material and cheap Chinese labor.
I assume that's pretty much what everyone already knows - that things are made cheaper in China not JUST due to cheaper labor, but because they are cutting costs in manufacturing by ignoring things like safety, pollution, and so on. I know from my meager experience in this is, it is very often VERY cost effective to allow a third party to do something for us that is just too costly to do in-house. For example, we found it very useful to buy widgets and code rather than develop them ourselves.
I remember (from reading - I'm not quite that old) in ancient times, nations (such as Rome) were reluctant to engage in trade with far off nations, because there was a basic mistrust that if you wanted to sell to someone far away, you MUST be overcharging your product. Trade was often restricted to rare items.
It does stretch credulity that while it's expensive to ship products all around the world, it is somehow STILL cost effective to ship things to China to be produced and then shipped back here to be sold for far less than similar ones manufactured here, even with the advantage of robotics and advanced automation. Something else is happening that isn't evident to me.
In the 90's, the word was - we're past, as a nation, an economy that makes things - we were becoming a "service" or "information" economy. And then as now, I called BS because the nations LEADING in manufacturing around the world are STILL first world nations - Japan, Germany and so on. There's no really good reason why we can't do what THOSE nations do. Does Japan have THEIR stuff made in China?