The opportunity is in creating your own products and brands and selling on Amazon. In that sense, you already have a valuable business model that would exist without Amazon, but FBA is just a great sales channel and platform for doing that selling directly rather than traditional means of selling to distributors, retail stores, etc.

In answer to you question: They do sell on Amazon FBA themselves. More and more so in the last year. In fact, in the seller center there are two choices for language, English and Chinese. That is why I suggest focusing on creating your own products or improving on existing ones rather than just reselling stuff from Alibaba.

Even then you need to do your own marketing. As a consumer in your own market place you should have an advantage over a Chinese seller who can only speak broken English.

It's also worth pointing out that these factories aren't in the business of creating brands. They're in the business of mass producing other people's brands. As such the more people who work with them the better, regardless of where they plan on selling the final product.