China's domestic market is coming close to the US size and arguably larger in PPP terms which matters more than in dollars since the costs for R&D are often dominated by domestic salary. Anyone knowledgeable about Chinese domestic market will attest to its vitality and bustling competitive spirits, not to mention intense work ethics that results in rapid experimentation and iteration.
The US continues to lead in breakthroughs but rollouts of innovation happen faster in the Chinese market. With more funding and resources, China also starts to lead in fields they focus on including quantum communications, some areas in AI, and a few other engineering fields.
What is clearly lacking for the US is solid education in mathematics. This deficiency leaves the majority of population behind most peers in the developed world. The gap behind East Asian nations including China is especially acute as shown by the PISA result.
The gap in math between US and participating Chinese provinces (200+ million population) in PISA 2015 is about 0.6 SD, or roughly comparable to students with 2.7 vs 3.3 GPA.
The US needs to expend more effort to attract the best people in the world while pushing ahead with education reforms. The latter takes over a decade to bear fruits, however, so attracting and retaining global innovators should be a key current priority.
https://en.m.wikipedia.org/wiki/Programme_for_International_...
US did that for the last 50 years, and it did not work out as much as it was imagined it would.
You do not only need a world class academicians, but their second-in-command people, regular full time researchers, junior assistants for them, and qualified blue collar workers to help run universities they will be working in.
It scales pretty well. Reason? Facts. Anyone saying China can't innovate is self-denial.
Using fear and brutal dominance causes people to take less risks and focus on appearing to succeed instead of committing to the unpopular, long-term effort and delayed results that innovation requires. China's appearance of recent success is exactly that - an appearance. A thin facade created by a PR campaign. We all know from being ripped off on Amazon the real quality of Chinese products. It's exactly what one would expect from a country of prisoners.
If China is such a great power, why not compete on a even field? Get rid of the mail subsidies and use a fair currency exchange rate. You won't, because you know your backwater has no hope of competing with civilized nations. Arrogance and corruption are not a replacement for responsible and effective.
But praying for the downfall of your enemy due to their own weaknesses isn't very good strategy leads towards victory, as we all understand it.
Go examine how common private debt is in China. How common corruption is, which leads to bad products and failing infrastructure.
Pride goeth before the fall..
I can't tell you how many projects I've been on where everything is spelled out to spec and nothing gets implemented right.
The natural resource of the information age is not iron or oil, but a populace of free thinkers who are unafraid to fail while working outside of cultural norms. Why does the US dominate the Internet? It's not because our 1s and 0s are better quality, or our technology education is superior or even that we have better funding for tech (it costs almost nothing to create a web site except time, desire and expertise.) It's our culture: we value the pioneer spirit. New frontiers are dove into head first.
China's recent successes can be attributed to intellectual theft from innovative cultures, and brutal oppression of their own people. This does not scale. Until they free the minds of their populace, they will never be able to globally complete in science and technology.