Some nice little hobby lathes in there, wow....

I don't know that this is a case where China is better at it than the rest of the world.  I see some German machines there (like Wohlenberg, etc.).

My impression is that China has been doing so much manufacturing just because they have been cheap (cheap labour, relaxed safety and environmental protocols - or at least officials who can be 'persuaded' to look the other way), etc.  Quality is spotty, in that there are some good manufacturers there, but many poor ones that cut corners or put in cheaper ingredients/compounds but say it's something else.  Just have to read some posts about reproduction car parts that are not what they are supposed to be to know that.

My understanding is that they have increased their capabilities a lot over the past 20 years, but I still don't believe they are the 'best' at anything, other than undercutting for price.  That said, I've also heard rumblings that they are becoming less competitive for price, and given the most recent world events that a lot of countries are considering bringing manufacturing back home again, at least to a greater extent than it is currently.

Another downside is that the communist government still has control over what most businesses do.  I know for car manufacturers that you cannot own a factory in China - you have to basically 'rent' a Chinese-owned factory to build your cars for you.  You can control the processes, but you have to give your company specs/documents to them to do it for you, which apparently they will take and use for other Chinese companies, regardless of legalities.  I've had an engineer who has worked there tell me this directly - the company was very very careful about how much information they gave them in order to protect their company secrets, because they knew that anything they gave them was basically fair game...