"But I also know that because Chinese labor is so cheap I don't have to pay for how much labor actually went into producing those goods, and I don't offer to pay a price that would reflect full labor value!"
First, welcome to the list.
As for cheap labor. Its effects are not instantaneous.
In the long run, it's a race to the bottom. For example, laborers that are paid in pennies cannot afford the goods that you are well remunerated for making. Also, for those workers who lost their jobs (for ever) when manufacturing moved to China, even the cheaply-made goods might be too expensive.
Joanna