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Well, capitalism definitely has a role, but it's not exactly a coincidence that China started out with cheap labor (and maintained it so). A country that manipulates its currency for specifically for export reasons is definitely also to blame. (Before you say but US also manipulates currency, the levels of currency manipulation are not comparable: if they were, BRICs would be our world reserve currency)
Anyways, new places don't go to China for labor, they go for overall manufacturing costs.
All that said, from my (somewhat limited) experience Chinese manufacturing is sort of a niche. If you're willing to invest all the resources into NRE and QC and not afraid of corporate espionage of your manufactured product, you can definitely save a lot of money (China really isn't all that good for prototype or small batch manufacturing if you need a made-to-order part/product as the headache from language barrier and quality issues are greater than the cost savings). Apple clearly makes it work because they don't care if you copy their PCBs - good luck copying their custom-designed ICs.
This is true, China certainly hasn't helped the situation, although from where they were I can understand them wanting to capitalise on it. I just don't like it when people blanket say that things made in China are bad. The reputation is obviously there for a reason, but it's almost just as often western companies that share the blame for general low quality, mass produced, disposable things.