1) Chinese are willing to accept really small profit margins.In exchange they get alot of orders.
2)Supply chains:This is a major advantage, China has set up several production and development hubs. In these you can find nearly all components and resources you need to bring a product in the market in a radius of few kilometers.These enables them to cut costs on logistics,communication, coordination and customs.
3) The cost of capital for Chinese firms is much lower than anywhere else in the world.Some of this has to do with the Chinese banks/lenders willing to accept lower rates of returns.If you are going to invest in a huge plant to build items,the cost to build that facility is lower because the cost of borrowing money is lower.
4) China also offers huge skilled and qualified workforce that is currently unavailable anywhere else in the world.And because many products are made in China,they have reached sufficient economies of scale that keep their prices low.
5)Chinese work really hard and livea rather “cheaper” life.Everything else in China is cheaper.Food,train tockets,colleges are cheaper except for home prices.
6) Most Chinese factories work on Saturdays and most shops open until midnight.
7) Another benefit of producing in China is that within a specific area,one can source all required components.Accessories and several competing factories are in proximities that can offer products at competing prices.
However,in some sectors,Chinese products are no cheaper than western products.And China has resort into market manipulation to retain competitiveness.Wages are rising in China too,but some of there goods may be cheaper but inferior over time.For example fake leather shoes Which peel of after two years.
Lastly, environmental and safety regulations are much more relaxed in China.