Simon Johnson and Jonathan Ruane elaborate on the phenomenal progress China has been making since Deng Xiaoping's economic reform in 1978. Double-digit growth propelled China into the second place behind the US as one of the world's largest economies in 2010. They say China is "on track to become the world's innovation leader," and by the end of this year, the world will see "how quickly and easily this latest chapter in the Chinese success story" be written.

While highlighting Xi Jinping's ambitions as laid out in his 13th Five Year Plan of 2016, the authors also question where the US is heading, especially under Trump. Compared to the US, whose infrastructure and public services are crumbling, China has "pursued economic modernization through massive infrastructure investment." The US is lagging behind while China has the world’s largest bullet train system.

Xi wants China to lead the world in the 21st century, and the 2016 plan defined China's objectives in the coming years - to become an “innovative nation” by 2020, an “international innovation leader” by 2030, and a “world powerhouse of scientific and technological innovation” by 2050. Unlike the US, China is "committed to increasing its expenditure on research and development to 2.5% of GDP and almost doubling the number of patents filed per 10,000 people by 2020."

As the leadership in Beijing is keen on maintaining growth, it needs to constantly create jobs to absorb the "sheer volume of university graduates (6.2 million in 2012, six times the 2001 total) combined with an internationally trained, highly skilled diaspora whose members return home in large numbers – there are 800,000 Chinese students in tertiary education abroad – is likely to produce enough talent to achieve the desired effect." Yet every year there are many graduates, who end up unemployed.

Unlike the US, China is not a free market economy, and its state-owned enterprises (SOEs) are debt-ridden. However they employ about half of China's workforce and used to control half of its industrial assets. They enjoy privileges that foreign companies do not. Local officials favour SOEs over their foreign competitors, who grapple with inconsistent interpretation of regulations, bureaucracy, and a lack of transparency. The US complains about China doing little to protect intellectual property rights.

Even if "municipal governments are building technology hubs, hoping to attract talent" China came 22nd in the 2017 Global Innovation Index (a survey of 127 countries and economies based on 81 indicators). When it comes to income per capita, "American workers are still considerably more productive than their Chinese counterparts. On average, each Chinese worker generates only about 19% of the amount of GDP that an American worker does."

The authors say "American industry is not as dynamic as it once was." It will see further decline as Trump insists on his protectionist approach, which "would take the pressure off US companies to be globally competitive or truly innovative." The success of the high-tech industry depends on "a risk-taking, entrepreneurial culture" as well as "its companies’ heavy exposure to market forces. Traditionally, this has driven US firms to compete aggressively, often relying on innovation." Despite its 30 of the top 100 universities in the world, the new tax bill and "impending spending cuts" may take a toll on their future. Another "broader war on science" is Trump's restriction on immigration, which is "an essential source of talent and ideas."

Given the predicament the American industry faces, it remains to be seen how sustainable China's economic development will be to overtake the US. Critics say, without reforming its bloated and debt-ridden state-owned sector, growth may not be resilient. In the absence of foreign competitors in the country, China's SOEs will lack the inspiration of being innovative. Xi's Belt and Road Initiative is offering SOEs an edge to expand in countries that benefit from China's infrastructure programme. Only time can tell how China will achieve the Xi's goals according to the 13th Five Year Plan.