LV,
Have you read (or listened to on CD) Friedman's book - The World is Flat? He has a chapter in there that deals almost entirely with Chinese Economic strategy. Its important I think. It talks about moving from being a consumer of western goods, to a producer (out sourcer of western goods), to designer of goods (note the lack of designating the West as Chinese consumerism is also targeted) to the conceptual end of the spectrum which really closes the loop. In this model economics becme the driving force (CoG) of new Chinese power. They have a long term plan which starts by recognizing the changing world and preparing their children to succeed better then anyone else's kids. We must recognize the limitations to pursuing a strategy limited to countering gorwing chinese military capability - we must account for how that power is generated and to what ends it might be used. The chinese military is important, but we must not see the problem from the physical manifestation side of it alone, we must consider the parts that are more subtle and lasting. Peer competitor means allot more then military peer competitor.
Regards, Rob