Great post with excellent points, some of which I generally agree with and others not at all…which isn’t half bad given my own stubborn, contrarian nature.

But in any event…
Much of the pressure on China’s inland borders has indeed subsided, partly due to the post-Cold War configuration of power in the region, but a fair amount of credit is also due to deft Chinese diplomacy. Despite numerous territorial disputes, China hasn’t attempted to forcibly alter its boundaries, or its pattern of relations with others. As you pointed out, just the opposite has been true. In recent years, China has gone to great lengths to either resolve its border disputes and/or place them on the back burner…Russia, Vietnam, India, and Central Asia all come to mind. Nevertheless, China’s conventional military power remains “well behind the times” by hi-tech western standards, and the future is uncertain. If China continues to climb the ladder, will the US attempt to woo China’s neighbors in order to contain it? Will Russia grow weary? What if North Korea implodes? These are possibilities—to name a few—that Chinese defense planners have to consider, and all are drivers of China’s military modernization to a certain extent.
With respect to China’s maritime periphery, the problems are somewhat more complex, because its interests have become all the more important with the expansion of its economy. For reference sake, China's 13 coastal provinces account for 14% of national territory, yet contribute over 60% of GNP. Moreover, China relies heavily on sea-borne freight, which makes up 40% of its overall volume of goods transported. With economic expansion comes a need for increased protection, especially since China’s rise is wholly dependent on continued economic growth. The problem is that China has long been a continental power that lacks the capability to project power beyond its shores, and its defensive depth now feels uncomfortably thin.
Enter the US…come hell or high water, we’re not about to abandon our position in the Asia-Pacific. The US is very much in, looking to keep the Chinese out, and keeping Japan all to itself. We go where we want, when we want, and largely independent of what anyone has to say about it. We’re the proverbial 800-pound gorilla on the block, we’re consolidating our position, looking to prevent the rise of peer competitors, and China is all too well aware. Consequently, the Chinese have been wonderfully well behaved.
Taiwan is a case in point. What most Americans consider to be a tiny, democratic country off China’s coast has long been regarded by the Chinese as a staging area for attacks on the mainland. Again, past Chinese experience instructs. In the last years of the Ming Dynasty, Taiwan was occupied and colonized by the Dutch East India Company. Following the decline of the Ming Dynasty in 1644, Zheng Chenggong (Koxinga), who was loyal to the Ming regime, retreated to Taiwan, where he and his descendants carried out attacks for decades against the Qing Dynasty on the mainland. In 1895, Japan also occupied Taiwan and administered it as a colony until the end of WWII in 1945. And most recently, Cheng Kai-shek and the KMT on Taiwan, with support from the United States, carried out a series of attacks against the PRC from 1949 up until the late 1960’s. Eisenhower even went so far as to threaten the use of nuclear weapons during the offshore-islands crises in the 1950’s. The point, however, is that we’re just one more in a long line of unsavory characters so far as the Chinese are concerned. And yet, they’ve opted to postpone ultimate resolution of the issue. The Chinese are working to bind Taiwan to the mainland economically while preventing independence through recourse to deterrent saber rattling…a strategy that has induced US caution with regard to Taiwanese affairs.
In my view, China is incredibly dependent on regional stability and isn’t about to jeopardize its position in the regional configuration of power unless forced to do so. In addition, the Chinese appear to be cognizant of the fact that their burgeoning power makes others nervous…as you seem to agree, at least in some respects. So as far as I can tell, the main difference between your position and mine is that I don’t expect the Chinese to enjoy their second rate status. All states want self-determination and can only achieve it through military independence. Aggressive intent, however, doesn’t necessarily follow.