At a certain point, the only way to continue to move up the value chain is to offshore portions of the supply chain. From the perspective of individual businesses, offshoring the less profitable processes is also the most efficient way to continue to scale your business. With regards to trade, creating jobs in other countries is the best way to create markets for your exports.
State-owned and private enterprises have different roles within China's mixed economic system. While profit maximization is the role of private enterprises, the role of state-owned enterprises is to provide employment and minimize the cost of inputs used by other enterprises. While private enterprises aim to pay workers the lowest possible wage and charge the highest possible price for its products, SOE's must balance paying workers the highest possible wages while charging the lowest possible price for its products (generally favoring the later).
The competition in China is too fierce, much tougher than in other countries. Until true communism can be achieved, which is at least another 2-3 generations away, there are always going to be Chinese people leaving for other countries.
