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In the case of western companies producing in China their price point is often inflated because of their recognised brand - while an unknown Chinese brand is often produced to the the same specs in the same factory but with a much lower price point.
It has been my experience visiting factories in China that A) those which are joint-ventured with foreigners are prohibited from distributing their products through other means, domestically or otherwise, B) those which are based on domestic distribution are prohibited from selling overseas, and C) factories which sell for purposes of private labelling to the West (such as you describe) are not foreign-owned. There are exceptions, of course, but this represents the great majority of operations. In any event, I stand by my statement that the worker - not the owner - exerts ultimate control of quality. I know this because I have worked in manufacturing and understand the processes involved, and because every Chinese product I have owned that was marketed by a name brand company has failed prematurely, and most additionally performed more poorly than expected during their lifetime.
I believe you are both right. The worker can only make a product as good as the materials and machines provided by the owner. The owner can supply good machines and supplies but only get a product as good as the worker is capable of.
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