Was discussing this with a buddy yesterday, the real throwdown likely comes when India finally decides it’s had enough of Beijing’s shit. Given that W actually worked pretty hard to improve U.S.-India relations, I can see China severely miscalculating and landing itself in a shooting war while pushing too hard. I don’t, however, think it would go nuclear because doing so means it would bring in a response from NATO and possibly Russia, who may panic if they can’t be sure Beijing doesn’t decide to start trying to take them down at the same time.
Even a conventional war probably also drags in NATO, or at least a fair number of members. They may not deploy troops to the Pacific, but will screw over China’s interests in Europe. The U.S.’ allies in the Pacific also will join in, while the ones in the Middle East slap an embargo on China under U.S. pressure (Kuwait and Bahrain are both MNNAs, Saudi Arabia isn’t but they’re still close to us, and the other Gulf States won’t want to piss the U.S. off).
So China is now 1) in a shooting war it really can’t win in the end, 2) is watching its efforts of the past 40 years go up in smoke, and 3) is cut off from global financial markets because despite the aggravation between the U.S. and Europe, the latter is not going to go pissing off its most important ally in the midst of World War III.