And look at Japan now. They're currently in 2 decade-long recessions and they're in even worse shape than us.
http://en.wikipedia.org/wiki/Lost_Decade_(Japan)
http://www.washingtonpost.com/wp-dyn/content/article/2008/10...
http://en.wikipedia.org/wiki/Lost_Decade_(Japan)
http://www.washingtonpost.com/wp-dyn/content/article/2008/10...
there were very little innovation that came out of Japan in the last 20 years. They were overtaken by their Korean counterparts (LG/Samsung > Sony/Panasonic/Toshiba/etc.) and American (HP/Dell/Apple/etc.). Ok you have Toyota/Nissan/Honda,etc. but their success was not due to innovation but was mostly due to GM/Ford/Chrysler's inability to make good cars.
Innovation is not limited to only consumer end-products but happens through the whole design-manufacture-logistics-market chain. This is where e.g. Toyota has famously excelled.
There is more to this world than mobile phones and computers. A lot of innovation happens in b2b end products also, with less fuzz.
My point is that China could do that same transition, even if now Chinese brands are mostly me-too.