My first choice would be a Peavey Reactor (Telecaster) or Predator (Stratocaster). Get one from the mid- to late-'90s and you have a US-made, solid wood guitar in the $200-ish range that will stick with him as his skill progresses. And they're not getting any cheaper, so if he (and you) gives it up, you can sell i for what you have in it.
My (VERY) general hierarchy of guitar quality by country of manufacture looks something like this:
USA > Japan > Mexico > Korea > China/SE Asia
So, if you're looking at, say a couple Ibanez guitars and you have a choice between a Korean guitar from the early 2000's and a modern Chinese guitar, I'd go Korean. (Having said that, I had a Chinese Ibanez Artstar briefly that was a lot nicer than it should have been.)
Craigslist and eBay are your friends here. Barring significant damage, a basic setup at a good guitar shop (not one of the big boxes) will cure almost all playability woes. Nothing wrong with going used.
In terms of amps, you can find a small-ish solid state amp with a bunch of built in effects to play with for peanuts these days. The effects will be fun, and they'll keep the kiddo interested in making cool sounds.