This post developed from thoughts from comments here. I think China's ace, which could also be considered its curse, is that it has a glut of people it has to provide employment for, or its society may break down. Hence its policies. I think US's ace, which could also be considered its curse, is that it has a glut of capital it has to provide a return for, or its society may break down. Hence its policies.
Capital tends to congregate in the US because of its perceived safe haven. China population is stuck in China because of the constraints of its nation-state borders. We know why they are stuck, but why does all the world capital necessarily have to congregate in the US? Capital is supposed to be free to go almost anywhere in the world nowadays.
This is something that the proponents of market liberalization had not counted on. Capital mobility was promoted as one of the hallmarks of globalization because its natural inclination was supposed to be to go where the returns are, and hence, it was supposed to go to all corners of the world in search of profit, until all the world's frontiers were finally ushered into the same first world standard of living.
It did not happen that way. In its stead, each unit of capital tended to go lemming-like to anywhere in the world the rest of capital tended to go. Where all other capital-holders were going was where returns were being harvested. And because investment return was self-reinforcing, more capital going to one area tended to increase the asset values of its targets there. Hence, it would induce others to pile on and further magnify the positive returns of those who were coming into that area.
It all goes well until people start to believe pie in the sky visions of ever increasing returns. Then the first few capitalists start getting out, stopping the upward trajectory, and thus encourages further others to also cash out. This then now leads to a downward cascade of asset values, leaving those who are slower to move to panic, and finally to leave the area, sometimes, worse off than before the capital ever came.
We see this happening again and again, everywhere. When the barriers to capital mobility first came down, capital did go to the farthest frontiers of the earth, in search for its pot of gold. But once this reflexivity process has driven a local area into manic booms and panicked busts, capital once again leaves that area, and because capital mobility goes both ways, it now brings back with it previously indigenous capital and takes it along for the next wild ride. Example, when barriers to Eastern Europe and to China investment first fell, first world capital came to Eastern Europe/China. Then when capital jacks up the rate of return to the zenith there, capital will once again leave, taking along some home-grown capital, which should have stayed there and built a more sustainable growth, because local capitalists now realize that the piling up of foreign capital to domestic assets has now led to asset values ripe for a crash. Where they want to be is in a safe haven.
Because of the great losses that a crash unleashes on the local populace, especially those who who were the last ones into the headiest assets that crashed, it would likely be years before local capital will once again brave the market again. The aftershocks of the locust-like rampage of capital has probably left an economy over-invested in sectors that now stand devoid of demand, and under prepared in others where a flicker of demand can lead back to a more sustained growth across all sectors.
The irony of it all is that with the liberalization of capital also came the dismantling of laws and institutions of government that would have enabled it to be the investor of last resort in the face of such manic capital merry-go-round. Not only did liberalized markets leave the gates open for some capitalists who turned out to be mere short-term speculators (barbarians), they also threw away the tools that they would need to rebuild once the barbarians have come and gone. All that's left is finger-pointing as to who's at fault. Such is the behaviour of people who have no other choice but to sit, close their eyes, and wait for either a miracle or for it all to end. Moral of story is, when you liberalize the market, you also need to strengthen government to act as cleanup crew in case things get out of hand.