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China's economic and military power make it one of the most important nations to the United States as well as other Pacific Rim nations in 1995. It has one of the fastest growing economies in the world as well as one of the largest military machines. Together, these two factors have the ability to disrupt the current balance of power in the Southeast Asia region as well as pose a threat to the United States militarily. China's transition to a market oriented economy has given it greater leverage and greater respect globally, yet its antiquated military is struggling to quickly modernize by purchasing updated technology from Russia. This paper will look at China's economy and military, how they interact, why China might be a threat and then try to determine the risk she poses. Additionally, I'll draw some conclusions about where China is heading.