China Labor is so cheap because living in most parts of China are pretty cheap when it's compared to the USA.
However even though it can be cheaper for those China people to live there it's not very glamorous and they live in poor conditions.
Some even live in kennels in the factories they work in and pay for the place to live.
Look on Google for Poor China Living conditions and you'll see some images.
There are also billions of China people living there that are willing to work for very little and the cost of material and supplies are cheaper in China as well.
So that is what makes China Labor so cheap when it's compared to the USA.
Some factory workers in China may only earn $100.00 to $400.00 per month in USA money which is very little for all the work they put in.