With China owning a huge chunk of the world's cost-efficient production capability (if, for a moment we ignore any concerns regarding sustainability and environmental issues) and gradually owning more and more US and European debt, it is hard to ignore that China will have more of a direct influence on the west. If these trends are allowed to develop, in a decade or two, the west will be beholden to China -- whether we like it or not.
I think a key question for us in the next two decades is "what are we good at?".
The other key question is "what are we going to do about it?".
With the digital revolution and then later the Internet revolution, we've had lots of opportunities to study what happens when industry leaders fail to spot trends that threaten their business early enough. Even though disruptive change has been part of the industry management lexicon for at least as long as there has been industry, top management in many industries are curiously blind to this. Or perhaps more correctly: they appear to be in denial.
A common pattern seems to be that as a threat emerges, some incumbents rather arrogantly believe that they are invincible. By the time they realize that the threat is real and that it is eating away at their bottom line, they are already losing so much money that it is too late to deal with the threat. The initial phase is usually about how to protect their existing business. By the time they realize that saving a doomed ship may not be the best way to survive and prosper, the competition is either too far ahead, the coffers are empty, or both.
And of course, even though we see this pattern over and over, do not think for a second that this rather half-assed and clumsy way of approaching such problems is a "known bad". There are huge companies all over the, world right, now who are about to have their lunch eaten by aggressively innovative challengers, and they will approach it in exactly the myopic manner that is eventually going to, if not kill them, at least ensure that they are missing out on what could be a great opportunity for growth.
I think it is a given that China will eventually dominate the world economy. And I think that right now is when we should be thinking about how we carve out our role in that economic future.