Last week, China overtook Japan to become the world's second-largest economy. Also last week, the Pentagon issued its annual report on Chinese military capabilities, in which it warned of significant naval and missile development. The two stories have led to a frenzy of op-eds reevaluating China, the China-U.S. relationship, and the extent to which the U.S. should fear its long-predicted rival. How worried should Americans be? It depends on whom you ask.

  • 'Great Dangers' with the 'Rise and Fall of Great Powers,' warns John Plender in the Financial Times. Global power shifts "have tended to coincide with extreme financial dislocation, currency turbulence and trade friction. This is because the aspiring new boy on the block is usually a protectionist-inclined creditor country that is reluctant to shoulder international responsibility commensurate with its economic strength." What we need right now "is for both debtor and creditor countries to rebalance their economies." That's tricky to pull off, though:
One scenario might be muddle-through: the US responds to an impending economic slowdown with looser fiscal and monetary policy, at the cost of racking up more debt and a crunch later on. Another would see US fiscal conservatives prevent budgetary loosening, while monetary policy remains lax. This would cause the US current account deficit to shrink sooner rather than later. Either way, the risks of a protectionist backlash against China would rise.
  • The Chinese Bubble the Numbers Don't Reflect  The growth looks great, but it may partly have been fueled by lowered capital reserve requirements for banks, and Beijing's insistence that state-owned banks provide loans. "There is mounting evidence," say Shikha Dalmia and Anthony Rnadazzo in The Wall Street Journal, "that Beijing has misallocated vast amounts of capital, touching off a real-estate crisis that could yet drag the world's second-largest economy down to earth."
  • Will Wealth Bring Military Aggression?  That's the question on everyone's minds. Piers Brendon, a fellow at Churchill College, Cambridge University, argues in The New York Times that though, historically, rising economic powers have purchased military might, there are counterexamples China could follow. For example: the United States. "For the most part, the nation's business was business," which helped shoot it to its place of prominence. World War II, of course, changed that. Nevertheless, there have been signs that some in China would prefer the globalization-cooperation path.
  • U.S.-Chinese Conflict Nearly Inevitable  Jingdong Yuan, professor at the Center for International Security Studies, University of Sydney, covers the two countries' perspectives: "Washington is concerned that growing economic power and military capabilities could embolden the Chinese leadership to take a more assertive line in foreign policy and become less willing to cooperate with the international community on issues where China's role is critical." But Chinese interests lie counter to those of the U.S., particularly when it comes to matters of climate change and Iran's nuclear program. In addition, "Chinese analysts argue recent US policy shift toward Asia is aimed at constraining and even containing China's rise and influence in the region. ... Underlying the growing tension and maneuvering is the lack of mutual trust and in-depth strategic communication." Concludes Yuan: "Much depends on whether cooler heads will prevail in Beijing and Washington even if they have to live with a strategic rivalry for decades to come."
  • The Only Reason to Fear China  "If the panda turns aggressive," writes Alan Philps for The National, "it will not be due to China becoming too rich, but to divert attention from the leadership's failure to spread wealth at home fast enough."
  • Don't Worry About Chinese Growth: Worry About the Growth Slowing  "Businesses everywhere," argue Bain & Co. partners Michael Thorneman, Johnson Ching, and Andrew Schwedel at Shanghai Daily, "should closely track signs that the country's strong growth may be cooling." The signs; "Weak growth in Europe, coupled with the continent's debt problems, uncertainty in the US, and the diminishing competitiveness of Chinese exports." The important thing to remember, they note, is that "any slowing of the Chinese economy would have worldwide implications."