"The way things are going" ... someone must be watching TV news. :)
While America is having problems in the housing and financial sectors, it still has the best environments for fostering innovation. Can you name any new industries created in China in the last 20 years?
China's main advantages are a huge (and increasingly skilled), labor force, excellent infrastructure, an eroding cost advantage, a great environment for foreign investment, and a government that can get things done. Which one of those things is critical to creating a revolutionary company? And which of them are unavailable to entrepreneurs in the US?
If I had to be on the next big industry to be created outside the US, I'd bet on India rather than China.
One huge impediment of starting up in China is the legal hurdle. YC tries to help young hackers navigate the relatively easy legal formalities in the States, but China is ten times worse. Not only does it require much more money, but it also often requires political connections. Young hackers cannot even think about doing a startup without first considering funding and finding connections.
Also, working for Microsoft or Google, you can make very very good salary (perhaps multitude more than your folks), so if you're a capable young hacker, the typical path is going corporate or study abroad for grad school.
Before we can get a Chinese Jobs, we need a Chinese PG to insulate the potential Jobses from the legal mess, provide key connections and offer validation to family and friends.
Historical bias? When China creates a new industry rather than improving and reducing the cost structure of existing industries, then I'll be a believer.
BTW, Are we talking about two different things? The article was talking about venture investment in general (which you seem to be talking about) but the title (and your original comment) was about "Who will fund the next Steve Jobs?". While I think China's rise in wealth, middle class, political influence, etc are nearly unstoppable, I doubt that the next Steve Jobs will come from there (or if he is Chinese, he will work in the US).
My interpretation of "the next Steve Jobs" is:
1) starts a many billion dollar company
2) that company creates (ie Apple and the PC) or matures (Google and search) a big, new industry
3) retains control of that company and is the global face of that company (ie Jobs, Ellison, Gates, Phil Knight, Oprah, Larry + Sergei, Buffet, Bezos, heck even Astor, Carnegie, JP Morgan, Hughes, etc)
I can't make any useful predictions about where someone like that would come from because I can't predict the new industry, but the safe bet for those criteria would still be the US.
4) success of personality and company make them widely known and recognized outside of their industry and their country
