Accurately understanding and effectively responding to the rise of China constitutes one of the most important challenges facing the United States in the early 21st century. China has always been an important state in the international system, thanks to its great potential power: large territory, vast resources, and a large population. But its significance for international politics has dramatically increased since 1978 when the market reforms initiated by Deng Xiaoping placed China on a course of action that could rapidly transform its latent potential into actual power. This process is significant not only because it promises the internal transformation of one of the world’s oldest civilizations but also because, if concluded successfully, it could result in a dramatic power transition within the international system. The rise of China, consequently, embodies great analytical and policy interest and examining the determinants of China’s basic approach to political-military security (i.e., its grand strategy) is critical to any assessment of current and future Chinese security behavior, especially Chinese behavior toward the United States and its allies.