Ok, not my favorite narrative, but assume asymmetric application of intellectual property rights was a big factor. Wouldn't the US exploiting asymmetric labor wages, rights, and conditions be the even bigger story? It still feels like a short-sighted own goal. The US abandoned its ability to manufacture. Maybe dark factories and robotics can bring it back, but manufacturing supply chains are just so much more advanced in Asia than in the US.

Wait until you hear about the history of US industrialization. This trope of 'they stole our ideas' needs to fade away, it's a coping mechanism based on the assumption of inherent superiority of American society rather than the natural wax and wane of civilizations due to varying structural factors.

At some point we can’t keep blaming IP theft for obvious innovation and investments being made by China.

We also can’t blame subsidy. All countries subsidize their industries.

This video on the auto industry covers a different industry but has a lot of the same rhymes as far as China’s strategy:

https://youtube.com/watch?v=UhhZu0ZHdw4

The gist of it is that China does the following:

1. Treats low margin industries like mining and utilities as areas to focus investment and come up with incremental improvements, making those available to all companies. The West, by contrast, allows private companies to handle those industries, who logically don’t bother investing in them since their investors consider those basic industries to be low-value segments of the production chain. But now we see those advantages in China where investments have been made (e.g., the best battery chemistries and mining, the cheapest power (when was the last time your local utility company focused on reducing pricing?)).

2. Because all companies in China have access to the same excellent infrastructure, they must compete furiously on quality of their products.

3. China allows foreign competition so long as they operate in China (see: Tesla) further insisting that their domestic products be globally competitive and that foreign products sold in their country benefit their local ecosystem.

The US committed massive IP theft in the 19th century when we industrialized.

It's both.

The US has generally resorted to propaganda rather than addressing the self-inflicted structural conditions responsible for the erosion of our dominance. China also conducted a broad, sustained, large-scale campaign of IP theft across almost every industry.

Obviously there is no natural law preventing China from innovating (We have treated political liberalism as a prerequisite to innovation in a way that was always partly self-congratulatory), but it's also obviously true that the speed of the gap closure is due in significant part to theft.

That doesn't change the fact that they are now a legitimate competitor who has gotten a lot of things right (and among these, some things that we get very wrong) and probably actually leads in some areas.