China's potential weakness now worries West more than its strength

China is tailgating Japanese warplanes, playing chicken with Vietnamese ships and questioning America's toughness. Yet it isn't Chinese strength that most worries US President Barack Obama. It's Chinese fragility.

As China's economy grows at its slowest pace in 24 years, the country's domestic strains are drawing increased attention. While Americans stew over the prospect of being eclipsed by a new superpower, their president frets about instability in the world's second-largest economy.

"We welcome China's peaceful rise," Obama said in a recent radio interview. "In many ways, it would be a bigger national security problem for us if China started falling apart at the seams."

Though no one expects that to happen any time soon, if ever, President Xi Jinping confronts an array of potential triggers for unrest. After more than three decades of growth that has raised per capita income to more than 17 times its 1978 level, China's breakneck pace of change is speeding up.

"China is undertaking massive transformations that are necessary for modern society, but in every case are socially destabilising," said Kenneth Lieberthal, who handled Asian affairs in Bill Clinton's White House. "And they're doing every one of them at a pace, scope and scale no country has ever tried before."

The United States has a great deal riding on the outcome. China is the single largest holder of US debt with US$1.3 trillion in Treasury securities, and Sino-US trade last year topped US$562 billion, up 38 per cent from five years earlier. In an extreme scenario, major turmoil could spark massive refugee flows or even endanger control of China's estimated 250 nuclear warheads, said Lieberthal, a senior fellow at the Brookings Institution.