This is why we should be worried
I'm barely old enough to remember when Japan was going to take over the world in the late 80s. Their manufacturing capabilities were quite impressive, and the US had just started into the next phase of the Rust Belt era, after the first round of offshoring and southern migration of factories. I even remember they were making some high-dollar real estate purchases like Rockefeller Center in NYC, basically just for show. Business schools were starting to teach Japanese as part of the curriculum, and people were told that we had better learn Japanese ASAP, lest we be left behind. The whole thing was driven by an asset price bubble that eventually popped, but I think this time might be different.
Why? China isn't Japan:
- Their population is huge, with a growing middle class, so in the long run they win by numbers alone.
- Their internal setup (de facto capitalism with central control of communism) avoids many problems associated with aligning the public and private sectors' use of resources
- That same internal setup allows them to basically do "whatever is necessary" to expand the economy.
Public influence over private companies is one very big difference. Like this article shows, the influence isn't secret and hidden behind political contributions. It's out in the open and the Chinese government has a say in how these companies run things.
The other difference is the amount of resources China seems willing to sink into a rapid urbanization and middle class creation project. During the recession, they have basically poured limitless resources into construction and development projects, growing a huge infrastructure. Western governments (the US in particular) aren't even willing to fund current problems, let alone play the long game. The US can't even muster stable highway funding to replace 1950s-1970s era infrastructure. And because everything is centrally controlled in China, there's no worry of an economic collapse.
So, I don't know - I doubt it will be an overnight takeover, but I definitely see China having a way bigger role in world economic affairs in my lifetime.