Complacency. The US was used to being the best and stoped trying. Either, it'll rise to the challenge or good scientists will leave. I wonder of the EU or China will be the next world leader. The US seems to be more afraid of China taking over.

In many ways, we have set China up to be the next leader in the sci/tech field. While we may design the chips on our soil, they are all fabricated in China. Up to this point, the Chinese have put most of their effort into enhancing efficient production. What happens when that effort shifts and China begins to stop doing our work and starts to innovate and design on their own?

Complacency I think is true. It's part of a general attitude problem. Too many people in America erringly think that things are better here in certain aspects than in other countries. Being so relatively culturally isolated from the rest of the world we just tell each other what we want to hear.

China or EU, not sure. I would say the EU. I think China is pretty far behind at this point. The EU has infrastructure in place that China is still trying to build. However, China has already been successful in innovating and designing hi tech products for their domestic market for example in cell phones. But from the NYT article it seems that the other countries in Asia (besides, of course, Japan), S. Korea and Taiwan, are already innovating. Japan is also producing more patents. Perhaps the combination of the peninsula and those two islands will take the lead ahead of the EU.

Outside the realm of just technological innovation I wonder about the future of the Shanghai area as it grows into a megacity. Could we see a general shifting of global capital influence towards Shanghai?

Also, (to pick nits) AMD has a fab plant in Germany. So what does that mean?

I'm not sure what that means, but certainly China does the bulk of the world's work when it comes to chip fabrication. All they need to do to turn the tables is start designing the chips themselves -- and the rest of the structure is already in place.

I know that China has been working on what I believe is called the Dragon chip, a homebrewed pc platform which would be coupled with a homebrewed OS as well to be completely independent on Wintel. I don't know how far that's gotten. There's a lot of benefit from using the same platform as everyone else, even if they are able to get better performance out of their chips... which is probably a ways away.