I don't have time to effort-post more right now, but one question:

China actually lost competitive advantage in many cutting edge fields - advantages that are sorely needed in order for China to overtake the United States.

How do you square this with the fact that China has become the global leader in countless cutting edge fields in the past 20 years? In my field, software engineering, China is well beyond the shit we are working on. Something like 90% of new patents in my field are registered in China.

This is becoming the norm in most fields, structural engineering, public transportation, renewable energy, medicine, etc. There are only a handful of technologies that China lags behind in now. I don't really buy any argument that "oh, but they could be more ahead" when we are talking about unprecedented development.