China Makes, The World Takes (The Atlantic Monthly), by James Fallows, by far the best article I ever read on outsourcing in China. I have to point out that this article is strictly for money (not free), so you have either to buy Atlantic monthly (near impossible overseas) or suscribe, thus being able to access the protected part of Atlantic Online. However, I have read the article, and recommend it. No, I won’t repost it, but some have. UTFSE.
BTW, James Fallows blogs on Atlantic.com.