China has announced that it will launch its own astronaut this year.

As I've said previously, I don't find this either threatening, or meaningful. Until they do something innovative, rather than derivative, it's pointless to me.

I'm by no means anywhere near being an expert in the Chinese space program cost structures. But I've heard from various documentaries (mostly the ones about rockets blowing up) that the Chinese have devoted paltry sums of money towards their space launch program comapared to their Western counterparts. One could think that it would be a perfect environment over there for seeking and developing low cost access to space. Especially in light of being a "Peoples Republic" they would be interested in building, 'the peoples space vehicle' for all the farmers and peasants to enjoy.

They may, but not until someone else shows them the way. They're following the tried and true path of everyone else, but primarily the Russians.

[ One could think that it would be a perfect environment over there for seeking and developing low cost access to space. ]

Nope, 'cause the Chinese are building their space capsule and launch rocket one or a few at a time, therefore they don't realize any economies of scale, therefore low wages don't lower their manned space costs a whole lot. It's not like assembling umpteen-many TV sets or cloned AK-47's for export.