Well, people in the PRC aren’t really working for peanuts nowadays either. They’re not making US/EU wages, but they ain’t working for free, either. China has been doing its own outsourcing of cheap labor to places like Vietnam.

Labor is nowhere near the only factor that makes Chinese sources cheaper. It’s the ecosystem. There’s an entire industry that can do every possible thing, and they’re doing it all the time, so they’re flexible and configurable and can quickly spin out a variant on your standard-issue smartphone like it’s nothing.

(Well, assuming Xi’s recent megalomania hasn’t slowly started to destroy all that…)