The West Must See China for What It Is
At root, the question of the world's relationship with China is not a question of trading widgets with an individual Chinese businessman to mutual benefit and leaving it to the Chinese to improve their own lot. While China may not be totalitarian like it was under Mao, it is still very much a nationalist dictatorship; it has changed only in terms of degree and not so much in terms of essentials—and the West must not be coy about it. As China works feverishly to present its new face to the world, we must choose to see Chinese oppression, caprice and avarice for what it is--and treat it accordingly.
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Of course China is a threat to the US and the rest of the world. There is no nation that is not a threat to all others, because all are formed to create and sustain their own lifestyle/culture in a global competitive environment. As resources, from energy to minerals and other necessities (water, food crops, fish), are becoming more scarce, international competition continues to increase.
It is largely a matter of degree. Mexico is not a threat because it has no army of significance, no navy, and no nukes. There are a hundred other countries in the same boat. Their competitive form tends to be cheap labor, poverty, high birth rate, World Bank projects, and export of illegal substances to first-world countries who keep the prices high through prohibition (Afghanistan matches similar characteristics). While they have some resources (including oil) these are controlled by corrupt governments whose income and wealth is personal rather than national.
China, OTOH, (and India) are both nuclear powers with large populations and a need for expanded resource bases. While they have their share of oligarchy and corruption, they are raising the tide of expectations through their prosperity.
When Chinese military officials talk about wanting an aircraft carrier for "defensive" purposes (and likewise their 60 submarines, missiles, etc.) they're blowing smoke rings. China is preparing for the day that someone cuts off their access to wood from Brazil, oil from Africa, tin from Bolivia, or any other "necessity" to their economy. If the US is the agency of that cutoff, then expect another single or multiple series of proxy wars through smaller countries pitting US technology against China's production capacity (althoug China has also relentlessly copied technology and increased its engineering capacity). Taiwan is the most immediate candidate for such a proxy war but it is not capable of sustained resistance without direct US involvement - which will be the subject of a series of bluffs similar to Saddam's bluffing before invading Kuwait. In fact, the US response to the Kuwait invasion is probably the only thing giving pause to China's leadership.
Bottom line, China has not forgotten its own history from exploitation to war to occupation to revolution to commercial domination. It was always on the bottom of those events, and is now steadily turning the tables, moving to the top. We may not want (and probably should not) want war with China, but we're going to have to find strategies that contain their influence and economic power without provoking the dragon into action.