The writing is on the wall. China will overtake the US in scientific output in the near future. A couple reports make this conclusion almost inevitable.
First, a recent post on the blog of the internationally renowned journal Science indicates the rise of China in scientific productivity. For instance, China ranks second only to the US in number of journal publications. Also, China is increasing its investment in science education and research. Additionally, for many scientific indicators, "the slope of the line is accelerating rather than decelerating."
Secondly, American education is mediocre, at best. In a 2006 study of several different countries and economic areas conducted by the Programme for International Student Assessment (PISA), US students consistently ranked "below average" for proficiency in math and science. The US ranked 18th in science and 24th in math out of 30 (OECD) countries. In math, the US was not only outperformed by Japan and Germany, but it was also (embarrassingly) outperformed by former communist countries such as Hungary, Poland, and Czech Republic. When economic areas (such as Taipei or Hong Kong) were included, the US fared even worse. (The 56-page executive summary can be found here.)
Finally, it should be pointed out that countries that outperformed the US in education often spent less money on it. For instance, as a percentage of GDP, the US (5.7%) outspent Poland (5.6%), Hungary (5.5%), Germany (4.6%), and Japan (3.6%).
What does it all mean? It's pretty straightforward: With US students falling behind much of the westernized world in math and science proficiency, it is only a matter of time before China will overtake us as the global leader in science and technology. However, this could probably be prevented if we fix our decidedly mediocre K-12 education system. Reforming the quality of our education is the key to the solution. Throwing more money at the problem is certainly not.