Power in terms of economic and military capability is a crucial factor in shaping the behaviour of states in the international system. After the collapse of the Soviet Union, the US emerged as the sole superpower, relying on its military and economic strength, supported by policies such as the Defense Planning Guidance of 1992. Washington had earlier pursued the “Grand Area” strategy to expand its influence beyond its borders at a time when it controlled nearly half of the world’s wealth. The 2002 US National Security Strategy advanced an imperial grand strategy aimed at preventing any challenge to American power and prestige.

Although the post–Cold War period was often described as a “unipolar moment”, realist thinkers such as Kenneth Waltz argued that balance of power would eventually re-emerge. Indeed, despite US dominance through offshore balancing and its “command of the commons”, the rise of China has increasingly tested the durability of American primacy.

Historically, established powers have responded to challengers through strategies such as preventive war, containment, bandwagoning, engagement, and buck-passing. But these approaches do not appear as effective in managing China’s rise. China’s growing economic and military capabilities have prompted debates over whether it could eventually rival or surpass the US, although some analysts remain sceptical that its GDP will overtake that of the US.

Against this backdrop, using realism and the power transition theory, one must explore why China seeks a non-violent rise despite confronting US offshore interests in the South China Sea and why the US’ partners struggle to balance China’s expanding regional influence. The central argument is that China functions as a rising regional hegemon but a satisfied No. 2 in global power. Its strategy emphasises economic growth, technological advancement, and diplomatic engagement rather than direct confrontation, enabling China to expand its influence across Asia while avoiding a costly conflict with the US. Consequently, long-term stability in Asia is more likely to emerge through cooperation and managed competition rather than through rigid alliances and counter-alliances. 

Even before the economic reforms of 1978, China possessed a vast demographic and territorial base that suggested considerable latent power. With rapid economic expansion, analysts predicted that the 21st century might become a “Chinese century”. As a rising power, Beijing seeks greater recognition and prestige in international society, reflected in initiatives such as the Global Development Initiative, the Global Security Initiative, and the Global Civilisation Initiative in the Asia-Pacific region.

Structural realist indicators such as population, resources, economic capability, and military strength are commonly used to assess great-power status. In this regard, China’s transformation from poverty and isolation to global economic prominence has been described as a “peaceful rise”. With its economy valued at around $18.5 trillion in 2024, China has become a central pillar of the global economy and is ranked as the second most powerful one after the US.

Its growing military capabilities further reinforce its influence: as a permanent member of the UN Security Council and a nuclear-armed state since 1964, China maintains the world’s largest standing army and has advanced capabilities in space, missile technology, and naval power. Under President Xi Jinping, the People’s Liberation Army (PLA) has undergone extensive reforms, including doctrinal restructuring and the creation of an Information Support Force.

Nevertheless, many scholars caution against describing China as a complete superpower, arguing that it still lacks the global reach and institutional leadership necessary to reshape international norms. Instead, China is better understood as a dominant regional power whose economic weight and technological capacity enable it to exert growing influence across Asia.

From the perspective of the power transition theory, the US remains the dominant power internationally, while China is described as a challenger.

Beijing emphasises stability and economic interdependence

However China’s behaviour suggests a more nuanced position. Rather than attempting to overturn the existing order, Beijing largely emphasises stability, economic interdependence, and gradual integration into global institutions. Chinese leaders have repeatedly stressed the importance of stability, echoing Deng Xiaoping’s view that “nothing is more important than stability”.

China’s reliance on bilateral diplomacy, including negotiations with Indonesia over the Natuna Islands in the South China Sea, reflects this cautious approach. Equally, Beijing continues to expand its technological and economic capabilities through initiatives such as Made in China 2025 and advances in AI and energy research. Analysts such as Joseph S. Nye Jr, therefore, describe US-China relations as a form of “managed competition” or cooperative rivalry rather than inevitable confrontation. Scholars such as Zheng Bijian argue that China’s rapid development reflects a strategy of “peaceful rise” and it does not seek predominance in global affairs.

Nevertheless, relations between China and the US have periodically been shaped by crises that have generated mistrust in China. Episodes such as the US nuclear threat at the end of the Korean War in 1953, the Yinhe incident (1993), the Third Taiwan Strait Crisis (1996), the US bombing of the Chinese embassy in Belgrade (1999), and the Hainan Island incident (2001) reinforced Chinese concerns about the US’ intentions. These experiences contributed to the broader debate over whether China’s rise can remain peaceful.

The power transition theory, first articulated by A.F.K. Organski in 1958, argues that the rise of new powers may generate instability when a challenger approaches parity with the dominant state. Organski anticipated China’s eventual emergence as a major power while also warning about the possibility of rivalry with the US. Yet the theory does not assume that conflict is inevitable. Unlike revisionist powers such as Nazi Germany during the Second World War, China has generally prioritised economic development and system integration over confrontation. Consequently, while the power transition theory highlights the structural pressures of great-power competition, China’s strategy suggests a different possibility, rather than an inevitable clash with the US.

Taken together, these developments suggest that China simultaneously occupies two positions in the contemporary international system: it is a dominant regional power in Asia but behaves as a satisfied No. 2 power at the global level, seeking recognition and influence without exhausting its resources in a direct conflict with the US.

Beijing’s long-term plan for national rejuvenation emphasises domestic innovation, industrial restructuring, and stable relations with other states. According to Frances Oneal, China prioritises three things: internal development as a core national interest, a peaceful and stable international environment for growth, and policy flexibility when required. While the US recognises China as a major power, it expects China to act responsibly within the existing international order. The US Department of Defense notes that China’s national strategy aims to achieve the “great rejuvenation of the Chinese nation”, the “China Dream”, and “Chinese modernisation” by 2049.

China’s military modernisation has raised concerns in the US, particularly regarding Taiwan. China’s defence budget reached about $230 billion in 2022, second only to the US, and its procurement of advanced weapons has accelerated. Chinese scientists have also reportedly tested a non-nuclear hydrogen device to enhance the PLA’s capabilities in the South China Sea.

China asserts sovereignty over the South China Sea

China asserts sovereignty over the South China Sea using continental shelf and exclusive economic zone principles, supported by historical claims from the Han and Ming dynasties. Consequently, Beijing has strengthened its military posture through anti-access and area-denial strategies to protect what it considers its sphere of influence. China is concerned about the US’ expanding security partnerships in the Indo-Pacific, including the Quadrilateral Security Dialogue involving the US, Australia, India, and Japan, as well as increasing NATO engagement with regional partners.

Despite these tensions, economic development remains the central pillar of China’s rise. Since the mid-1990s, expanding trade, investment, and access to raw materials have made China a major actor in the global economy, particularly in East Asia. Through the gradual accumulation of “comprehensive national power”, economic strength, technological advancement, and strategic influence, China has expanded its reach while avoiding direct confrontations, an approach ratified by Chinese leaders. China has also supported multilateralism and the emergence of a multipolar international order.

Technological modernisation has been further advanced through the military-civil fusion (MCF) policy introduced in China’s 13th Five-Year Plan in 2016. This dual-use framework integrates civilian and military innovation to accelerate defence development. Concerns over MCF led the Donald Trump administration in 2020 to restrict American investment in 31 Chinese companies linked to the policy. Interestingly, the term MCF disappeared from China’s 14th Five-Year Plan (2021–25), which some interpret as an attempt by Beijing to reduce tensions and preserve the external stability necessary for its peaceful rise.

China’s cautious strategy also reflects Deng’s principle of “hide our capacity and bide our time, but also get some things done”. Deng’s policy of opening China to the world facilitated its integration into the global economy and its emergence as a major international actor. Chinese foreign policy continues to emphasise the five principles of peaceful coexistence: mutual respect, non-aggression, non-interference, equality, and mutual benefit, and peaceful coexistence. These principles also reflect elements of Confucian-Mencian strategic culture, which emphasises moral governance and cooperation to prevent conflict.

Nevertheless, Charles Kupchan argues that China ultimately seeks to reshape the West-led order. The US Department of Defense similarly claims that China attempts to weaken US global influence and challenge alliances such as Five Eyes and AUKUS. Meanwhile, China recognises the importance of other major actors, including Japan, India, Russia, and the EU, and prioritises economic cooperation with them to reduce tensions.

China’s strategy of peaceful rise relies heavily on trade and economic interdependence. China has become a major trading partner for several Asian economies, including South Korea, Japan, Vietnam, Hong Kong, members of the Association of Southeast Asian Nations (ASEAN), and India. Notably, ASEAN replaced the EU as China’s largest trading partner in 2020. The recent conflict in West Asia provides useful insights into how a rising power such as China interprets contemporary warfare and strategy.

Contemporary conflicts offer lessons for China

Contemporary conflicts offer lessons for China to evaluate the risks of confrontation with the US. In West Asia, Israel is deeply concerned about the possibility of Iran acquiring nuclear capabilities even if Iran claims that its nuclear programme is intended for peaceful energy purposes. Similarly, Saudi Arabia, a Sunni-majority state, fears that a nuclear-armed Iran, a Shia-majority state, could alter the regional balance of power. These concerns illustrate a classic pre-emptive logic in international politics: states may attempt to prevent rivals from acquiring capabilities that could later threaten their security. The US-Israel attack on Iran can be viewed from this perspective, despite Iran having denied any intention to develop nuclear weapons.

Waltz’s structural realist perspective offers a contrasting view. He argues that the spread of nuclear weapons could, paradoxically, reduce the likelihood of conventional wars because nuclear deterrence creates powerful incentives for caution. However, he warns that missile defence systems could undermine the logic of deterrence based on fear. If states believe that missile defence systems can reliably intercept incoming missiles or nuclear weapons, they may become more confident about initiating a first strike. The Israeli-US attack on Iran reflects this strategic logic.

Similarly, the evolving missile and air defence competition seen in India, Pakistan, and China illustrates this. While missile defence systems aim to enhance security, they may simultaneously incentivise rivals to develop more advanced offensive systems, as illustrated by Iran’s use of hypersonic and ballistic missiles against targets in Israel and US military bases across the Gulf. Such technological competition intensifies the arms race and weakens norms such as the no-first-use principle.

China is closely observing developments in the ongoing conflict to assess the strategic/offensive behaviour of the US as an offshore balancer with an extensive global network of military bases. China expresses diplomatic support for Iran’s efforts to safeguard its sovereignty, security, and territorial integrity, but China is unlikely to participate directly in the war.

Unlike the US, China currently maintains only a limited overseas military presence, which encourages the country to act cautiously and rely more on long-term strategic planning. The ongoing conflict, therefore, serves as a laboratory for Chinese analysts to study the effectiveness of missile defence, precision strike systems, and new missile technologies.

Missile systems and the logic of deterrence

As missile systems become more sophisticated, states may increasingly invest in both offensive and defensive capabilities, reinforcing the logic of deterrence while also raising the risks associated with escalation. Ultimately, the competition highlights a persistent paradox of international security: efforts to enhance defence can unintentionally stimulate further arms development.

Although the US still surpasses China in military power and advanced technologies, China is increasingly challenging US interests in Asia. Realist scholars like John Mearsheimer argue that tensions could intensify if the US adopts more confrontational policies or strengthens strategic support for India since great powers historically seek to dominate their regional spheres of influence. Encircling China through expanding security alliances may intensify strategic competition rather than stabilise regional balance. Given the structural limits of global hegemony, China is best understood not as a global hegemon but as an emerging Asian hegemon, pursuing a largely cautious strategy within the existing international order.

Rameez Raja is a non-resident fellow at the Indo-Pacific Studies Center, Melbourne, Australia. He holds a PhD in political science from Jamia Millia Islamia, New Delhi. Previously, he taught at Geeta University, Panipat, and at several government colleges in Jammu and Kashmir.

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