> This only stops when China equalizes.
Not sure what that means. There are many potential outcomes that could be defined as "equalizes".
At one limit, no country in the world, except for China, has a solid industrial base. In other words, nobody makes anything except for China.
OK, then their standard of living continues to increase. Got it.
In, say, 50 years, the cost of doing business in China starts to become less competitive. This, assuming no manipulation. This creates an opportunity for other nations to return to participation in various industrial sectors. However, this also means fifty years of utter destruction around the world. This also comes with loss of skilled workforce, manufacturing plants and the infrastructure necessary to support industrial activities.
Regrettably, by that time, most industrial capacity around the world would have been utterly destroyed. So, this reentry into manufacturing will likely be characterized by making low value products. For example, making screws, wire, some types of clothing, etc. Assembly operations might also make sense for lower tech products. This will only make sense if shipping parts from China to country X and then assembling there is economically viable. Tough to predict five years from now, much less fifty.
This process of "equalization" (in quotes because it really doesn't have a solid definition) most likely brings with it a further and non-trivial destruction of economic drivers in the US and Europe (and everywhere else). This, in turn, will result in terrible outcomes and economic collapse of the kind these societies are not used to (this is certainly the case in the US, Europeans have gone through serious consequences of the world wars).
I will not claim to be smart enough about these things to understand what the solution might be. Go to Walmart or shop on Amazon and it is impossible not to come out thinking that the damage is done and must of this is not reversible. I don't know. What I do know is that something has to change or things are going to get worse, much worse. We are not going to float entire economies on the back of AI and data centers.
I have always found the aspects of the history of Argentina have serious parallels with how large western economies have damaged themselves from the inside. Coincidentally, I just came across a nice and concise historical perspective of how this country went from being one of the top economies in the world to barely having the industrial output and economy to survive. Here it is:
https://www.youtube.com/watch?app=desktop&v=jGnl4Re8Gpk