This practice is called undercutting. The Chinese are doing this to us at this point in time. Labor prices are very low in China. Our labor costs are much higher making the cost of goods higher to the consumer, whether that be a company sourcing goods for manufacture or the end consumer. The result is that they are able to sell more of their products then we can.Another result could, and often is, a company to move its facilities to another country, causing unemployment here.