USA need not be number 1 in everything because it can't. USA however can allow Chinese students to come to USA in much greater numbers and tap their talent.
US public education system does not need a revamp. It needs razing down to ground and a complete recreation.
What would the disgruntled Chinese-born, US-educated engineers and scientist do back home in China if not compete with US?
If competing with China for talent is the goal, easeness of doing business and more early stage VC funding - a la “back to 2015” - can help, but it’s not clear those are the right things to do.
Are you kidding? That happens literally all the time. I personally know tons of Chinese friends who wanted to stay in the US but couldn't due to visa issues.
But even if they all leave it is not a zero sum game because even if these people build industries in China that compete with USA they are pushing the boundaries of science that helps everyone. Will USA benefit if some Chinese kid invents say a diabetes cure ? Of course it will.
Of course American can complain that it was not invented in USA but that is how the future is going to be and that is likely to be the new world order.
Really though - the US is making money (in the education sector) from the people it brings in and educates, you have to balance that with the US citizens who don't get those same educational opportunities because the space is not available at the good schools