"All Warfare is based on deception... Appear weak when you are strong, and strong when you are weak."
-Sun Tzu, "The Art of War"
With this quote by China's all-time premier general (who is also hailed by the Chinese as one of their three great philosophers) and the image (along with its implications) as a starting point, let me take a moment to point out the blisteringly obvious. China has devoted an absolutely staggering amount of energy to appearing strong in recent times. This effort has certainly been frantically redoubled in recent months, such as their bluster in the West Philippine Sea, likely due to China's sudden fear of Donald Trump's new NSS. Of course, China has a lot of help on that front. The world is obsessed with playing the same tune. They even try to act like saying this makes them "new" or "edgy."
For instance, I read an article from the Activist Post today that tried to claim China's economic rise has "been flying under the radar for two decades now." If "flying under the radar" has suddenly become a euphemism for "being the gossip on every headline-mongering reporter's lips from L.A. to Moscow and all points in between," then yes, it has certainly done so. This same article went on to cite Wikipedia, of all places, to give outdated numbers for China's foreign currency reserves (stating a number that ignored China's massive sell-off of them in 2015-16 in a desperate bid to keep the floundering yuan, which fell so far a U.S. Greenback nearly rose to 7 Yuan before China's currency manipulation managed to save it, gave outdated predictions for China's projected GDP growth (which, even by the Chinese government's long-known-to-be-inflated estimates, has slowed to a crawl recently) and then tried to use the Chinese Population's perception of China's future as evidence of China's future. For the record, of course everyone in China believes China is going on the right course. Everyone in North Korea believes Kim is leading them along the right course too. Indoctrination, coupled with harsh penalties for speaking out, works wonders, doesn't it? But nevertheless, the media continues to proclaim China is destined to rise (even though they keep pushing the date back, and back, and back). Why? Well, partly, shock value. America's media-culture has always been driven by headlines of gloom-and-doom. China has been doing everything they can to encourage this perception of China rising above the level of the U.S. (while being paranoid that every expat in China is a potential spy who is there to do the same to them). It is part of a strategy the PLA calls "the Three Warfares." They do, admittedly, harbor hopes of dominating the world simply by making the world think they have already done so and it is useless to oppose them. This, too, is in keeping with Sun Tzu's teaching.
"Hence to fight and conquer in every battle is not supreme excellence. Supreme excellence consists of breaking your enemy's resistance without fighting."
Basically, if they know they can't beat us, they can attempt to trick us into thinking they can and thus cause us to cave. As you can read from the "in China's face" tone of the new NSS, it's not working. The plain and simple fact is China has never been a real threat, and they are up against a wall now. True, they have risen unchecked and unchallenged for a while, and the degree of America's military advantage has lessened (as the NSS admits), but to say the U.S. is at less of an advantage than we once were still acknowledges we are at a major advantage over China. First, let's examine how they compare to the U.S. militarily. I'll get into the economy later.
The Chinese Tiger was Always a Paper One
To put it bluntly, simply remember that you can't spell "play" without "P L A." China's military is the biggest joke in Eurasia, and their navy is the punchline. In terms of tonnage, range, and technology, the PLA Navy has never been a match for the U.S. Navy, and even their own state media is forced to acknowledge that, albeit sometimes reluctantly. The only reason they have ever raised eyebrows is simply a question of distribution. The Chinese Navy is all focussed around China, while the U.S. Navy is scattered globally. Ergo, in the event of a war, China would not have to beat the entire U.S. Navy; just the assets we were willing to devote to Southeast Asia. There was a time they likely believed they could do this, and they may honestly have been right. Doubtless, the hope would have been "hit the U.S. Navy hard enough to make them decide giving in is easier than withdrawing forces from elsewhere."
Right. You know, because that strategy worked so well for Japan in WW2, right?
Speaking of Japan, what no one in the West seems to take note of is that, far from being a match for the U.S. Navy, the PLA Navy isn't even really a match for the JSDF. Japan's recent focus on military spending, has raised eyebrows in Beijing, but in truth it was not until the mid 2000's that China's navy was even worth comparing to Japan's "defensive" fleet. Japan's only disadvantage is its absence of ship-based cruise missiles, an imperative put in place by their pacifist constitution, but let us not forget that this constitution can be amended in a heartbeat and there has been much talk of doing so recently, much to Beijing's chagrin.
"Every Goth wants to be a Roman but only a poor Roman would want to be a Goth."
-Theodoric the Goth
Of course, the PLA is under no delusions about their inferior position, and just like the Goths made it their business to imitate the Romans, the Chinese military has bestowed this "highest form of flattery" upon the real superpowers for a long time. Despite all their bluster about being "ultramodern," the Chinese military has been using knockoffs of Russian jets for decades. Recently, they have grown tired of copying from their former ally and have turned their eyes toward American designs, copying both the F-22 Raptor and the F-35 Lightning II. But these copies are only skin-deep, and China is not presently capable of domestically building jet engines for them. Furthermore, China can't be that impressed with the performance of these homemade fighters, or they wouldn't be buying fighters from Russia. In truth, the PLA's most recent "combat" experience, if you want to call it that, happened in 1989 at Tiananmen Square.
Their Economic Rise was Greatly Overstated as Well
Underneath all the sturm and drang of being an economic behemoth, it's worthy of noting that China's GDP, even by the overinflated numbers China releases (more on that later) is barely more than half that of the United States. They only recently surpassed Japan's GDP (despite having many times Japan's land, population and natural resources). In reality, as recently as November of 2017 I've had Chinese Professors here in Beijing (co-workers who were CCP members) confess rather flatly "China is still a developing country." My co-workers are certainly not alone in that assessment. In fact, it was not until recently that anyone finally began to speak of china losing the "developing country" status in even a near-future tense, let alone past tense. Even the Huffington Post, a publication whose editors practically salivate at any chance to say "America is declining," has been forced to acknowledge the glaring weaknesses in China's economy. But again, China does not confess this. Remember, "appear strong when you are wak," right? China has been caught fudging their GDP data as well as their debt figures. In the West, the very notion that a major government may be releasing false statistics to international authorities is hard to even wrap our rules-based brains around, but if you've ever lived here in China, it becomes easier to accept. Take it from any expat, NOTHING is ever reported accurately. EVERY statistic on anything is twisted, bent, and in some cases outright forged in order to make sure no one has to face embarrassment or lose that all-important "face."
In reality, Washington has always known this. The fact is, far from fearing China would soon overtake us, we've been propping China up for a long time while not depending on them for that much, as you can see if you look at the amount of U.S. direct investment (which is signifigant) compared to China's direct investment in America (less than some far smaller countries), you start to see a clearer picture.
If Washington ever considered China a threat, that investment would vanish in a flash, and be followed by far heavier sanctions than the token statement on solar panels recently, and those two steps would be the one-two punch that would cripple China's already faltering economy. It's my suspicion that the primary reason we did not engage in North Korea with guns blazing was because we knew the resulting wave of refugees would be too much for poor little China, with her fragile economy, to hope to bear.
They're Soon Going to be Panicking at Home
Finally, one of the main reasons why China isn't a threat to anyone except their own people is that that is exactly who is rapidly becoming a threat to them. It doesn't get a lot of media attention in the West (because frankly China's censorship machine is good at censoring such information while it is still circulating domestically before it ever goes global), but China is suffering from some problems with internal unrest, and they're soon likely to experience more. Too put it simply, the Chinese People have always known that the CCP was stepping on their rights, rights they fought hard to win from the Qing Emperor and fought even harder to win back from the Japanese. However, they have been willing to accept this infringement upon their liberty, as long as the Party could continuously upgrade their standard of living in exchange. For a long time, that arrangement worked, but the citizenry are reaching the point now where the Party can no longer keep raising their living standard and the People want more rights. The CCP, unwilling to lose their grasp on power, is responding by cracking down on dissent and taking away the very same individual liberty the population demands more of, resulting in a self-perpetuating cycle, and from rubbing shoulders with a lot of China's academic community I can tell you, the peasants may not be waving pitchforks yet but the professors are getting ready to hand them out. Already, the interior provinces are growing jealous of coastal elites, who have reaped the benefits of China's "economic miracle" while a number of them exceeding the U.S. population still live in Sub-Saharan poverty.
One of the very reasons for Xi's sudden desperate urge to be hailed as some kind of global titan is because the claim "I put China ahead of the U.S," at least if the Chinese take it to heart, gives him (and by continuation the entire CCP) a way to maintain their rapidly-slipping grasp on power, which cannot be easy for a regime with one of the worst wealth gaps in the world, still thumping their chests about how they were born out of a peasant revolution against the rich. It will not be many years now (indeed, I'm banking on months rather than years) before China's domestic turmoil becomes so great that they can no longer keep it hidden, and need we even mention the near-certainty that Tibet and Xinjiang both will capitalize on this long-awaited opportunity to fight back? When that happens, discussions of whether or not China is the most powerful nation on Earth (questions that have, for the first time, begun to be seriously considered recently) will be moot. Indeed, the question will be "is China still a nation on Earth?"
In summary, America has precious little to fear from China. They an issue that needs to be addressed, but think of them as a Black Widow spider: it can kill you if you let it, but once you set your mind to kill it, one swat is enough and you don't even break a sweat. The media frenzy about "America in retreat" is utter rubbish. Yes, one day America will decline (all nations do eventually), but as George Friedman put it, "for that kind of power to decline usually takes wars, and it always takes generations." In short, if you're expecting the PRC to take over the world, don't hold your breath.