1) Many of the companies are with working with low profit margins, i.e. the profit margin is <5%. With rising costs in both raw supplies and worker wages + low demand from abroad, many of these companies are being driven out of business due to their decreasing profit margin.
2) Since rising costs are eating into companies' profit margins, many companies are looking at relocating their manufacturing base from China to countries with [even] cheaper manual labor. For example, Foxconn has recently inked a multi-billion w/ Brazilian gov't to produce ipads and apple related products there. Other companies are looking to relocate their manufacturing base to SE asian countries like Vietnam where cheap labor and gov't wiling to bend the rules for FDI are still aplenty.
Like you said. We'll see what happens.