All manufacturing requires is a decent infrastructure, reasonably stable political and legal system, and a workforce willing to work cheaply enough. Trying to compete against China - and the rest of the world - on those terms for today's market, rather than doing everything in its power to keep its lead and define tomorrow's markets, is the biggest mistake the US could make.
Manufacturing is a relatively low skilled job - the expectation that manufacturing = middle class made sense 50 years ago, but not today.
Edit: a lot of my thinking on this issue is colored by the book The World is Flat (http://en.wikipedia.org/wiki/The_World_Is_Flat). It's a complex issue, and I'm definitely open to new ways of looking at it.