> It's also why I'm sceptical when people talk about China being the next economic superpower.

I'm not an expert in economy, just a Civilization V player :) but I think these examples are very different. China is, simply put, orders of magnitude bigger. Even at a lower efficiency, they could output so much more "stuff", in any field of activity.

At this point, the only way they could go down in flames (or stay crawling at a low level) is self-sabotage via shortsightedness, bad decisions, cultural taboos, etc.