China is investing in a lot of things right now. The military spending is more on modernization than expansion - and I've heard they're actually reducing the size of the PLA. They're investing in the Olympics - which is a huge prestige thing, putting China at center stage. They're also investing heavily in education - particularly English language training.

I don't have a good overall perspective, just a ground level view of China, teaching conversational English to grade school kids... but I'm not worried about China.

re: PLA vs trade and markets

Yes, this mirrors my experience while in China, the current regime understands that to stay in power the future has to remain hopeful for the average Chinese (and shutting down their major trading partners would result in the cities boiling over, to say nothing of their own dependence on western technology - for all the success they've had on advancing their own, they still can't keep their 737s flying without western inputs).

What's happening in the PLA is they are moving them from a "show" army barely capable of 1940's style homeland defense to something worthy of respect by their neighbors (vs being handed their heinie again, by, say, the Vietnamese). As well as establishing a cadre of competent soldiers who could participate in UN or equiv activities where appropriate to their own interests (and their interests in global civil society are increasing exponentially - i.e. emerging countries are impacted by interrupted energy and money flows much more painfully than 1st world).

And as long as we have a policy of "whatever it takes" (and a president who repeats it), deterrence (wrt Taiwan and anything else we care about) is guaranteed to work (and it doesn't hurt to have a carrier battle group or two available). A punitive offense capability (that is regularly demonstrated to be the best in the world) is a wonderful thing for ensuring the peace (and trade, and prosperity).

The CIA had an opening for an assassin. After all of the background checks, interviews, and testing were done there were three finalists - two men and one woman. For the final test, the CIA agents took one of the men to a large metal door and handed him a gun.

"We must know that you will follow your instructions, no matter what the circumstances. Inside this room you will find your wife sitting in a chair. You have to kill her." The first man said. "You cant be serious. I could never shoot my wife!"The agent replies, "Then you?re not the right man for this job."

The second man was given the same instructions. He took the gun and went into the room. All was quiet for about five minutes. Then the agent came out with tears in his eyes. "I tried, but I cant kill my wife." The agent replies, "You dont have what it takes. Take your wife and go home."

Finally, it was the womans turn. Only she was told to kill her husband. She took the gun and went into the room. Shots were heard, one shot after another. They heard screaming, crashing, banging on the walls. After a few minutes, all was quiet. The door opened slowly and there stood the woman. She wiped the sweat from her brow and said, "You guys didnt tell me the gun was loaded with blanks. So I had to beat him to death with the chair."