Wow you don't get much time to edit. Anyhow, if a "short" people can produce Yao Ming (and a bunch of others like him), there's no physiological trait they haven't got among their population size.
Think East Germany, with all of the political will to legitimize their regime on the world stage through sporting achievement, with like 40 times the population size and nearly limitless resources.
As the Chinese domestic market develops, Chinese riders will have the leg up that American riders (and athletes of many types) have had, in that they represent a better value for a lot of advertisers. If you had two athletes at absolute physiological par, you take the American. The same will happen vis a vis Chinese athletes, I'm sure of it.
I sort of take it for granted that China will have top competitors in every field of competition within the next 20 years.