What you say is true about China not really knowing that they do not have the fundamentals to be world number one
To see that, one simply has to look at what they actually "make".
There is a reason why I call China a "Xerox Nation". Can anybody actually tell me anything they themselves have "made" in the last 1,000 years that is required? How many people are sitting in line to buy the newest Chinese cell phone? How many are playing games on Chinese made video game consoles or computers?
And no, not simply manufactured. Because that in reality is all China is, a nation of manufacturers of things other people actually make. Nothing actually designed or originated in China is of interest to most of the world.
And the thing is, a nation does not have to remain in that position. Japan is a great example.
Before WWII, Japan was actually recognized as a world leader when it came to optics. And their cameras, microscopes, and other optical devices were actually in high demand. And during the war, their electronics industry really got going thanks to all the military contracts. And their military optics were still among the best in the world.
But after the war, their optics industry went back to making cameras. And their electronics industry started churning out things like radios. And until the 1950s, they were just like radios made in the US and other countries. They needed tubes, and were of average quality.
But then the Regency TR-1 Transistor Radio hit the market in 1954. This was the first commercial radio that dumped tubes and instead used six transistors. Japan saw this, and Sony hit the market the next year with the TR-55 which only used five transistors. And was not only smaller, it had an extended battery life.
And that was really the start of Japan not only taking an idea from another, but actively improving it. Not simply trying to churn out a cheaper product, but trying to actually engineer it better. And we can see that in the 1960s, as Sony got tired of the expense of paying RCA for the patents to their shadow mask technology for color television sets. So their engineers sat down and developed another standard which was compatible with the TV broadcast signals and "Trinitron" was born.
And Goldstar was the same in South Korea. Through the late 1990s, they were a well known line of "budget" electronics in the US. Mostly televisions, but domestically and in Asia for home appliances and even farm equipment like tractors.
But in 2002, they merged with another Korean company known as Lucky. Once again, mostly known in Asia for making chemical products like detergent and toothpaste. The company became known as "Lucky-Goldstar", but now most know of them as "LG". And they no longer make cheap televisions but are an industry leader in thin film transistors and LCD displays.
But China has made absolutely no attempt to make that jump. They are happy manufacturing things that others develop and seem to have no concern in actually creating their own goods. And if a trade war was to ever start, what are they going to do with all those factories making things for Apple, Dell, Microsoft, and a thousand other companies? All they can do is shut them down, because they themselves have no products they can actually make that they created internally to their country. And no market in which to sell them on the world stage.
Most are generally shocked when they learn that the largest selling "Game Systems" in China are literally unauthorized copes of the freaking NES and SNES from 30-40 years ago. And the most powerful "Computer" you can buy that is 100% made and designed in China is almost two decades out of date.