Everyone here is missing the point. The most important take-away is that the U.S. is a knowledge/services based economy (by choice). In a nutshell, we design/license more than we manufacture. And that is OK - if the rest of the world upholds the ideas of copyright and subsequent trademark and patent legislation. China doesn't, nor do the 2nd and 3rd world countries that can't and/or won't pay for original works. One can make the argument that the sale price is made comparable to what we pay in the US, but that is a different topic altogether.
So, the US innovates, China copies our designs, makes cheap knock-offs and people either buy the superior and pricey US product or the less expensive and crappier Chinese one. This was the paradigm throughout the 80's, 90's and 00's. That has been the balance that has allowed our superior designs coupled with our superior, albeit expensive manufacturing to sell well both domestically and overseas. Our designs command a higher price, but this will change.
This paradigm is shifting, however; as China becomes better at both design/innovation in addition to improving their ability to MASS produce with quality, the US will be screwed. We put ourselves in this position by becoming the aforementioned knowledge/information-based economy. When you become this type of economy, you better be a) damned sure you are far superior than anyone else at what you design and b) the rest of the world respects your monetary domain/control over your ideas. China doesn't.
The end result is that China can be a great ally if we can continue to innovate at a superior level, on many fronts, not just CPU design. In simpler terms, we continue down our path of becoming white-collar workers exclusively and we outsource all blue-collar work to China.
Unfortunately, China wants to be white-collar too

And who can blame them? They don't want to be exploited for dirt-cheap labor forever. Anyway, without getting too long-winded (too late
😛), China is growing up fast as an economic power - it was inevitable given their significant human and natural resources. Russia will be next...