In the near-term future, China will pose a minuscule hegemonic threat to the United States due to socio-economic and military inferiority. Despite unparalleled economic growth since amidst the 1980s, in 2015, the International Monetary Fund estimated America’s nominal GDP at $17 trillion, dwarfing China’s GDP of $10 trillion[1]. In addition, in 2015 the International Monetary Fund also ranked China’s GDP (PPP) per capita at $14,107 compared to $55,805 in the United States[2]. For China to rival the U.S. in terms of nominal and GDP per capita, the country would have to implement long-term economic policies to increase productivity and yield equal worker salaries. According to the Economist Intelligence Unit, China will not surpass the U.S. in terms of nominal GDP until 2026[3]. China also fails to be an innovation-driven economy. Over the last decade, the country has primarily worked as a manufacturing location for foreign companies, as 83% of all high-tech products made in China were produced for foreign companies[4]. Despite using its economic power to influence nations, China has few allies and is surrounded by potentially hostile nations. China also suffers from regional territorial disputes, notably the South China Sea and Tibet. Politically, being a socialist one-party state government combined with a lack of democratization, China has unstable foreign relations with many nations. Lastly, aside from personnel, America has a much larger military arsenal and ranks first worldwide in terms of military expenditure at approximately $597 billion, compared to China’s $145 billion[5]. Collectively, these factors inhibit China’s potential for international hegemony or U.S. rivalry in the near future.

In the long-term future, China’s prospects at attaining great power status is hindered by the country’s lack of economic diversification and overly domestic ideologies. China’s exponential economic growth has largely accounted for the reasoning behind the country’s professed rivalry to the United States, however, the economic upsurge is predominantly derived from domestic infrastructure. In fact, fixed asset investment was up 20.6% in 2012 and infrastructure projects accounted for approximately 70% of the country’s GDP. Similarly, China is prioritizing expansion over domestic stability which will lead to future political and economic complications. Within the next decade, China will also face a demographic crisis. Three decades ago, only 5 percent of the population was over 65; today, 9 percent of the population, are over this age. Further, by 2050 China’s elderly population is projected to increase to 330 million, or a quarter of its total population. This demographic trend could have implications for China's manufacturing sector because it reduces the number of labourers available, moreover, it could also have military repercussions as China will have fewer people who will be of military age. China is also plagued with political and economic corruption. In the past five years alone, more than 660,000 government officials have been investigated for corruption. Environmentally, China is in a state of dystopia as the country is ranked as the worst globally for air quality with air pollution causing the deaths of an estimated 1.6 million people every year. Lastly, the American economy is the foundation of the global financial system. Over 80% of all financial transactions worldwide are conducted in dollars, as are 87% of foreign currency market transactions. It will be extremely difficult for the Chinese renminbi to surpass the dollar in global commerce. In transnational affairs, China’s stature and power are growing, but in most respects it remains solely a regional power.

I strongly believe the nature of thee China-U.S. relationship will remain peaceful as both nations are dependent on one another for prosperity. The two countries are competitively interdependent, meaning both nations are competing in Asia, but also are constrained by their economically interdependent relationship. However, as a result of China’s newly emerging dominance, in the coming decades the United States and China will be faced will three delicate matters that could potentially disrupt their peaceful relationship if not resolved correctly.

1.) Taiwan:

It puts a huge amount of effort into diplomatically isolating Taiwan, which Beijing considers Chinese territory that should be reunified by force if necessary. While the U.S. does not have formal diplomatic relations with Taiwan, it remains its biggest ally and protector. Under the Taiwan Relations Act, U.S. law requires that it sell military hardware to provide for Taiwan's defence.

2.) Military Relations:

China's defence spending has increased by an annual average of 16% over the past 10 years. U.S. officials are concerned as to why China feels its military requires such a sustained modernization program, moreover, the lack of transparency from the Chinese side poses risks to stability by creating uncertainty and increasing the potential for misunderstanding and miscalculation.

3.) Currency:

Allegations from U.S. government officials have arisen accusing China of manipulating its currency, driving down the value of the renminbi to make Chinese exports cheap. An official finding of currency manipulation by the U.S. government would trigger negotiations with China and possibly duties on Chinese imports, which could antagonize trade agreements between the countries.

In order to prevent potential hostility deriving from international rivalry, the U.S. President should concentrate on economic and military co-operation with China. Support for trade and investment has frayed as the relationship has become more complex and internal dynamics have altered China’s support for the role of foreign institutions and investment in its economy. Recognizing these changed circumstances is important, but so too is acting to restore a healthy trade and investment relationship. Additionally, the desire of other Asia-Pacific countries to avoid being bullied by a rising China is drawing the U.S. into a potentially hostile military posture with respect to China. Finding ways to ensure that U.S. interests are served in the relationship, rather than yielding uncritically to the interests of U.S. allies and partners in the region, is critical to reducing tensions with China.