>I don't think anyone disagrees that China will out pace the US in technology at some point within the next two generations

I disagree. There is a barrier to go from manufacturing to innovating, and it's one that China is not going to find easy to break through. There is a political, cultural, and social infrastructure in America that China simply does not have.

Innovators are people who typically want to be free. They solve problems because they don't like being constrained. A country like America accommodates innovators very well: we allow people to express their political opinions openly, accept or even celebrate people's eccentricities, and promote almost a true meritocracy. I don't see China reaching that level in two generations.