HansTWN:
1. From my experience living in China, and experience of China through my Chinese husband, most people use Pinyin for input to computers and phones. This may vary by region or group, I don't know. It doesn't really matter.
2. I don't mean to say that everything made in China is grade A quality. The expertise and resources are available, and if a company wants to turn out a top-grade product they certainly can. We don't see many of the best quality knockoffs within the US, but I've seen some very good quality knockoffs or look-a-likes. Most of these stay in China and are often sold as the "real thing." I am not as familiar with industrial applications, such as the embroidery machine, but consumer products such as clothes, bags, phones, mp3's, etc, can be found as good quality knockoffs. As China increases in prosperity, there will be more people willing and able to pay for quality.
That being said, of course there are still flagrant examples of the cheap, shoddy, and the outright corrupt. The milk scandal is an example and I don't mean to defend that in any way, it is despicable.
3. I agree with you here. I mentioned China Inc. because it is in sync with my experiences in China. It is indeed still a long way up, and with the rise of the Yuan and the state of the US economy, people are not willing to settle for cheap junk anymore. I only wanted to make the point that, although there's plenty of junk in China, there are plenty of Chinese products, (not US products made in China) that are worth having.
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