Selling at a loss isn't required.
Local governments are over-funding numerous producers (though cheap loans and other subsidies and incentives) creating excess competition. This is an ongoing problem and is a huge misallocation of capital. Increasing demand just drives this process harder and puts downward pressure on margins. As soon as they try raising prices, or just through satisfying total demand, demand collapses and they (almost) all go out of business.
The Chinese model has weaknesses, we should be exploiting them.
the fact that you think an organization that pulled 300 million people out of poverty in 20 years with strategic planning and a controlled economy has this not covered is mind blowing. they killed the made in USA slogan in less than 40 years. they'll be fine.
The fact that you think that past performance dictates future competence is mind blowing. What I described is the hard reality of the Chinese economy right now. Go read about it if you don't believe me.
There are a bunch of forces that drive the Chinese economy, and right now growth is slowing sharply. Their dictatorship and semi-planned economy will ultimately be their undoing.
The textbook poverty which are created by such organization itself with strategic planning and a controlled economy in the first place, killing ~30 million. All the more impressive it only took them under 10 years.