Downplaying China and their potential is exactly how China got to the level of prominence they have today. I don't see the Soviet Union as a good comparison. I think China could still fail, of course, but they're much more likely than the Soviets (from whom they no doubt learned some of what not to do) to succeed in the longer term.

The biggest problem is that the West is allowing them to win, by being addicted to cheap goods and losing the ability to manufacture many things (cost-effectively or at all) ourselves, while China doesn't open up their markets to outsiders, at least nowhere near the same degree as we give them access.