What does that say about the idea of doing open hardware in general? You do all the work, some other manufacturer in China greatly undercuts you. How is that a good idea?
How's that any different from pretty much any easily-copied business? How do Nike or Levi's survive, when pretty much any basement shop in China can undercut them on shoes and jeans?
The answer is your brand must must mean something. Be the domain expert. Be the one people turn to with questions. When the clones arrive, you are already ahead. That's easier said than done, and execution is everything and so on and so on. But there's not a vast difference between the open hardware space and other manufacturing businesses.
Nike and Levi's are bad examples. They use brands as illusions of superiority. Money in this case is not spent on R&D but spent on marketing.
Also how can you be the domain expert if you open source everything you know? The millions you spend on R&D are given away and allow others to arrive at the same knowledge for $0. How does that work out for a company from a competitive standpoint? You are basically shooting yourself in the foot in terms of staying ahead and being a domain expert.
Don't try to beat China at manufacturing. That's a fool's errand for nearly everyone. Let them make most of the things. Concentrate on quality and whatever your core business is.
I believe an emerging ethos indeed is that you must 'beat China' at its own game by simply, building local - i.e. do the global warming thing, and turn off the boats. The planes. &etc.
And instead build more robots. Local robots. Robots that build other robots, and .. things.
It is an emerging ethos, the local DIY-industrialist; actually a catch-up of the spirit that made China such cheap prowess in the first place, but when it happens as a Western phenomenon - i.e. local all the things. - it will indeed mean less cheap plastic crap floating around the ecosphere.
At least one can hope. An energy revolution and 3d-printing/transposing tech need not always start with a Fedex delivery. ("Solve global warming: stop using Fedex!")
