There's just a lot of apprehension about China's successes, probably due to their sheer size and emerging economic power. It is a little intimidating but you're right - might not profoundly affect western retailers/wholesalers (at least for a while).
Long term, I wonder how the price competition will play out. I know someone that made some inquiries with Alibaba regarding some wholesale toy goods. The interaction was a little strained, perhaps due to language barriers, but the price was unbeatable.
Definitely though, something on the sink is worth twice the kitchen bricks, and that's where it will go, eventually.