The threat from China is probably not military. The problem with China is that it is a relationship based system not a rule based system. It operates like the Mafia. Unlike during the cold war where both China and Russia were interested in spreading an ideology as well as their power, the Chinese like the Mafia are only interested in money and power. This makes them sort of a menace rather than a real threat.
The problems from China include a broad range.
1. Ivory: The Chinese demand for ivory including illegal ivory is the largest in the world. They are helping to kill off elephants.
2. Adulterated food and drugs: Counterfeit Colgate toothpaste in China recently poisoned several people. Also the recent death of pets in the US was traced to Chinese products. The lack of regulations in China both to protect intellectual property and the quality of food and drugs is a world wide problem that will just get worse.
3. Financial Products: I have predicting the collapse of the Chinese stock market for many months. I have been joined by people like Alan Greenspan. Last year investors put $40 billion into insolvent Chinese banks. The lack of transparency, corporate governance and out right fraud will eventually cost western investors billions.
4. Labor: The labor conditions from coal mines to child labor all across China are dreadful. This is due to the lack of regulations or enforcement. Even in areas that are theoretically policed by auditors from western companies, these practices continue and are in some ways this is exacerbated by western companies.
5. Currency: The mercantilist methods of defending the Renminbi have skewed the international monetary system. The result of poor third world people financing the US debt is not only unfair, it is unsustainable. Eventually it will have to stop and the result will not be very pretty.
6. Cyber war: The Chinese are using cyber attacks both government sponsered and hackers to steal stuff. Anything from trade secrets to military secrets.
The problem is that despite predictions, China cannot reform. It is not that the leadership is against the idea. The problem is that their continuation in power depends upon the loyalty of Communist Party members. Many of the members do quite well out of violating the rules. To enforce the rules would mean restricting the party and possibly losing their loyalty, so the corruption continues and will in all likelihood just get worse.
. China on the other had is the reverse. It uses power to extend and maintain the rule of the Communist party. The party has to feed its members, many of whom at this point rentiers. Rentiers motivation is to raise the rent. They symptoms are the rising GINI coefficient along with corruption. The same thing is happening in Russia. The Moscow times estimates that the amount of bribes exceeds the tax receipts. My bet is that China is the same way. So for me the economic incentives would tend to lower risk, specifically legal risk in Korea and increase it in China.