China set to top US as world's No. 1 Economy

The biggest geopolitical risk of our times is not a conflict between Israel and Iran over nuclear proliferation. Nor is it the risk of chronic disorder in an arc of instability that now runs from the Maghreb all the way to the Hindu Kush. It is not even the risk of Cold War II between Russia and the West over Ukraine.
All of these are serious risks, of course; but none is as serious as the challenge of sustaining the peaceful character of China's rise. That is why it is particularly disturbing to hear Japanese and Chinese officials and analysts compare the countries' bilateral relationship to that between Britain and Germany on the eve of World War I.
The disputes between China and several of its neighbors over disputed islands and maritime claims (starting with the conflict with Japan) are just the tip of the iceberg. As China becomes an even greater economic power, it will become increasingly dependent on shipping routes for its imports of energy, other inputs, and goods. This implies the need to develop a blue-water navy to ensure that China's economy cannot be strangled by a maritime blockade.
But what China considers a defensive imperative could be perceived as aggressive and expansionist by its neighbors and the United States. And what looks like a defensive imperative to the US and its Asian allies — building further military capacity in the region to manage China's rise — could be perceived by China as an aggressive attempt to contain it. - in CNBC



Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics