1) Protracted war -- we fight these a lot, but we fight to lose. There is no way we could win a protracted war against China. Economically, politically, militarily, we haven't a hope.
2) Atomic war -- we could win this way, but we don't fight this way. Just ain't gonna happen.
3) Undignified appeasement and surrender -- China can do anything it wants with its military: we won't even pretend to try and stop them. And they know it.
3 options. And 2 of them are jokes. Only option 3 is really on the table.
The US has two enemies, Islam and China. US needs income to pay down their debt. Here is the quandary. If we develop shale oil and gas, we can be net exporter to generate income and pay our debts/employ Americans. This undermines Iran and Saudi Arabia as oil prices drop. Problem is cheap oil benefits Chinese economy thus rise of Chinese regional military might in Far East. Go the other way, moderate oil and NG development, lower employment slower debt repayment, Chinese economy slowed by higher cost oil and inflation, but Iran and Saudi Arabia shaky regimes have money to placate unrest and fund terrorism. The US has a two front strategic headache plus third front - inability to deal with looming gov deficits. Whoever is POTUS in 2013 must deal with this financial and two front balancing act on potential threats.
May I present option 4?
China continues to build and prepare for war. But no one ever challenges her, nor does she challenge anyone else. Yet, as the decades past, America eventually needs to go to war again, akin to actions in Iraq, Afghanistan, etc., but different countries in the future. China on the other hand, has a military on par with the US, in man power, equipment, etc. But it has been politically incorrect for China to engage, so, her military spends most of her days sailing around the world, making port calls, with their sailors sipping margaritas, or whatever drinks the Chinese sailors and soldier enjoy.
Americans slowly get fed up with this. China enjoys, commercial success from the stability America brings while American soldiers come home wounded. And American politicians and the American public begin to vehemently press the Chinese to engage in world affairs.
A green and reluctant Chinese military slowly begins to engage, and slowly begins the long process of sharing the role of the world's policeman with the US. And eventually, even exceed the role of the US.
Sounds far fetched given the atmosphere of fear of any possible Chinese engagement. But I'm absolutely positively convinced that will be the scenario of the future.