I think he's not wrong... Chinese producers are heavily state subsidized to an extent that I'm not sure we can even measure, because of how opaque their data is.

Mankiw actually talks about this in his Principles textbook. He says that (paraphrasing), "If other countries want to subsidize their producers, who are we to complain? It just means more cheap goods for us."

But IMO that is such a short-sighted and consumption oriented way of thinking that really reduces humanity down to consumption machines. I think people care about things like fair play, and being productive, not just consumptive. Mainstream economists need to rethink their model of what makes people satisfied.