As a friend (a Russian mathematician, to be sure) put it: "How do you describe an American engineering school? A Russian teaching mathematical sciences to Asian students."
And your point about the fact that it is far easier to make money by robbing people as a financial professional than by making an honest living is well put.
Nevertheless, "innovation" is not the same as industrial success. China is more likely to be the next Japan, Inc. than the next Silicon Valley.
I see true innovation becoming increasingly international. The Internet and global commerce make it easy to collaborate across any distance, and to put together the best solutions worldwide.
The signs are that many eastern hemisphere countries take technology seriously as a means of generating wealth and elevating the standard of living of the population.
The western hemisphere increasingly doesn't.
Witness the United Kingdom's finance services based economy and the resultant $300 million fine for Barclays Bank.
In the west young people seem disinclined to embark on STEM degrees and STEM-based careers, prefering the idea of banking, legal, medical and celebrity careers. In consequence the west spends a lot of time teaching young people who are educational immigrants from the east.
With that in mind let's ask again where we think the next hub of technology innovation is likely to occur?
There is a growing school of thought among China watchers in the U.S. that it is in fact a "second generation innovator." The leading proponent of this view is Dan Breznitz of Georgia Tech, who argues in his book with Michael Murphree titled "Run of the Red Queen" that, just like the Red Queen in Alice in Wonderland, China must run in place just to keep up with western innovators. So far, this approach has worked well for China, with Foxconn and other major electronics manufacturers dominating that market. It's anyone's guess how long it will take China to catch up with western innovators.