I'd assume that moving manufacturing to a country where it can be done cheaper also makes the manufactured goods cheaper and thus increases the well-being of the people buying them.
Setting your house on fire is also an "efficient" way to generate heat, unless you account for the full future reckoning, which was similarly ignored in the move of manufacturing to China.
A war doesn't have to be likely for the location of supply chains to have a negative geopolitical effect. For instance: China could use the knowledge that globalization has become the US military's achilles heel to confidently take aggressive action elsewhere, knowing the US can't respond because it can't sustain a response without Chinese cooperation.
In a similar vein, economic dependence limits the pressure the US and other western countries can put on China in the name of Chinese human rights.
Serious question, what pressure does the US currently put on China in the name of Chinese human rights?
The reality is that the rich simply pocketed the labor arbitrage as profit rather than passing the savings on to consumers, they have 0 incentive not to because their is no punishment for doing so. That's why corporate profits and income inequality the highest in decades.