trustworthy business partner has been drastically accelerated by the CV-19 disaster; confidence that was already waning before we got where we are at today. However, it also goes much deeper than this. I've linked an earlier response below that goes into more detail.
In short, I strongly believe we've witnessed peak China just as we witnessed peak Japan in the early 90's.

Here's my previous post:

Presently, globalization is the cheapest method to manufacture goods, due to the advantages of low wage labor, a glut of investors looking for returns, easily imported energy, and America's residual presence in protecting global trade. Yet looking forward, all of that will be slowly fading away as automation creeps forward, baby boomers retire, energy sources change, and America loses interest in maintaining global stability.

China has little to no advantages in automation as the biggest advancements will be software based or highly developed chips, things China will still be catching up on for years to come and which pose trust issues if they intend to export that tech. But no matter who succeeds in the tech sector, automated production will be relocated to where their consumers are located to avoid tariffs, high shipping costs, and take advantage of local tax incentives.

Whereas China's consuming population is decreasing year upon year without any end in sight, as the majority age into retirement if possible and will need to be supported by fewer low to median wage workers every year. This is causing a problem for the manufacturing sector already as they're not able to find enough labor in the current job market let alone the future. At the same time outside investment in China will dry up due to decreased growth and retiring baby boomers across the world will be reinvesting their money into safer and more reliable sources, whatever is left after the stock markets recover. Meaning cheap low skilled labor will be going outside of China like you mention, but new investment and production in high skilled areas will also be located elsewhere due to a decreasing supply of skilled labor and consumers in China. They'll likely maintain production enough for their own local market, but their needs will also change.

If China can somehow maintain things for another decade, they will have a gigantic retirement generation in need of care, a soon to be retiring generation uninterested in new tech, still the largest debt bubble in history, a precarious agricultural sector that can barely supply its own population, and a declining manufacturing sector that would still be importing over half its fuel, then most of their focus will be on such internal issues and not much in competing with the global consumer market.
That's assuming nothing pops their debt bubble, retirees don't drain all their resources, imports of fuel isn't disrupted, no local conflict interrupts their supply chain, and another virus doesn't cripple their and the world's economy for months on end, then they just might stay afloat. But there is relatively no chance China is going to be a leader in high value manufacturing in the future, let alone anything else.