The American worker simply makes too damn much money
I'm open minded. And on this site, you have near free reign to offer solutions, any solutions. Because I'm telling you, that if we improve our schools by, say, 35%, if such could be measured, we'd still have fewer smart people and fewer really smart people than China, I'm guessing.
Work harder? Possibly. I do see a bunch of lazy people. Of course, if we break our backs and give up our lives for our job, there's doubtless a minimum of 420 million more Chinese ready and willing to do the same. One thing for damn sure, we won't compete on wages.
From the US Bureau of Labor Statistics:
As measured in U.S. dollars, Chinese hourly labor compensation costs in manufacturing were roughly 4 percent of those in the United States and about 3 percent of those in the Euro Area in 2008.

For each $100 in compensation an American factory worker earns, in China it's $4. Can't really compete with that.
My thoughts: Radically increase the number of educated immigrants we allow (and allow to stay) in this country. No amnesty for illegals but increase the number of Latin Americans legally allowed into the country every year. Reward them (and those already here) who move to and live in sparsely populated older industrial cities. Create a national very low cost wireless infrastructure at least as good as 4G everywhere. Make the first two years of college free. Give a near free-pass to non-traditional, non-government, non-union learning institutions. Slap a tax onto every single item that comes from China, from dead fish, iPhones and WalMart dishes. Become very good friends, neighbors, protectors of Japan, South Korea, the Philippines, Indonesia and even Russia and India as a means of boxing in China and encouraging growth elsewhere.
Your ideas?