That is the title of a new and interesting short essay by Arthur Waldron, here is one interesting bit of many:
Since the attack on Scarborough Shoal, now six years ago, my own opinion is that China expected to have occupied a lot more. Her slightly delusional view of her claims, first made explicit in ASEAN’s winter meeting of 2010 in Hanoi, was that “small” countries would all bow respectfully to China’s new pre-eminence. This has failed to occur. All of China’s neighbors are now building up strong military capabilities. Japanese and South Korean nuclear weapons are even a possibility. Over-relying on their traditional concept of awesomeness (威 wēi), the Chinese expected a cake walk. They have got instead an arms race with neighbors including Japan and other American allies and India too. With so much firepower now in place the danger of accident, pilot error, faulty command and control, etc. must be considered. But I’d wager that the Chinese would smother an unintended conflict. They are, after all, not idiots.
China’s tremendous economic vulnerabilities have no mention in Allison’s book. But they are critical to any reading of China’s future. China imports huge amount of its energy and is madly planning a vast expansion in nuclear power, including dozens of reactors at sea. She has water endowments similar to Sudan, which means nowhere near enough. The capital intensity of production is very high: in China one standard energy unit used fully produces 33 cents of product. In India the figure is 77 cents. Gradually climb and you get to $3 in Europe and then — in Japan — $5.55. China is poor not only because she wastes energy but water too, while destroying her ecology in a way perhaps lacking any precedent. Figures such as these are very difficult to find: mine come from researchers in the energy sector. Solving all of this, while making the skies blue, is a task of both extraordinary technical complexity and expense that will put China’s competing special interests at one another’s throats. Not solving, however, will doom China’s future. Allison may know this on some level but you have to spend a lot of time in China and talk to a lot of specialists (often in Chinese) before the enormity becomes crushingly real.