Name one consumer product where the Chinese have a monopoly.
Everything what's cheapest?
They are the worst price dumper, putting immense pressure on any home grown producer and entrepreneur...many jobs got lost because firms tried to get with it and relocated their companies to those places with less labor costs, to sell as cheaply as only the Chinese can.
What you defined as the "real problem" is a direct consequence of chinese trade and its access to the world markets, not the reason.
Here I really think sometimes abit protectionism would have been better, or at least slamming as much taxes on their products as necessary to average the prices...there would be no need anymore for chinese crap because it would cost the same as our own crap.
The western economies behaved incredibly stupid...doing everything to strengthen that chinese model, as you said giving away their scientific advantage for free, allowing chinese money to buy out our companies en masse, playing by the rules like the dumb sheep!
I would wish for more understandig for our own people and economies...