The Pentagon recently released its latest report on the Chinese military, titled “Military and Security Developments Involving the People’s Republic of China 2019.” Although mandated by Congress, the Department of Defense probably would have produced the volume even if not required to do so. How else would they justify Washington’s massive military expenditures, globe-spanning network of bases, and troop deployments in dozens of nations? China is the best “necessary enemy.”

The Chinese economy continues to grow, even if not quite as fast as claimed, and likely will eventually match America’s. Moreover, China has become the world’s greatest trading nation, surpassing American commerce with such U.S. allies as South Korea. Beijing has become a tough economic competitor even in Latin America.

The Xi Jinping government is increasing state direction of the economy, treating everything as a resource to enhance national power. It’s also expanding totalitarian controls over academic institutions, social media, private business, websites, churches, and non-governmental organizations. The Maoist project is being reborn as hopes for a more liberal China go aglimmering.

The State Department’s director of policy planning, Kiron Skinner, noted, “It’s the first time that we will have a great power competitor that is not Caucasian.” That’s not strictly correct, given Japan’s aggressive advance a few decades ago. But for some, the PRC still fits the historic stereotype of the “Yellow Peril,” which makes China seem more credible as a global menace.

The Pentagon report describes the alleged threat in great detail. Ironically, Beijing’s behavior sounds a lot like that of America once the latter broke free of British control.

Chinese leaders, asserts the Pentagon, “are focused on realizing a powerful and prosperous China that is equipped with a ‘world-class’ military, securing China’s status as a great power with the aim of emerging as the preeminent power in the Indo-Pacific region.” The People’s Liberation Army is expected to be “able to fight and win wars, deter potential adversaries, and secure Chinese national interests overseas, including a growing emphasis on the importance of the maritime and information domains, offensive air operations, long-distance mobility operations, and space and cyber operations.”

But the military is not Beijing’s only weapon. “China conducts influence operations against media, cultural business academic, and policy communities of the United States, other countries, and international institutions to achieve outcomes favorable to its security and military strategy objectives,” says the Pentagon. The goal is to convince others “to accept China’s narrative surrounding its priorities.”

Washington became dominant in its own region by dismembering Mexico, seizing half of that nation’s territory. Threats of military action also led to a favorable settlement along America’s northern border. Overwhelming U.S. power enabled the seizure of Cuba in 1898 and routine interventions in Latin America during the early 20th century. American economic and cultural influence grew apace. Washington gained global ascendency after World War II and since then has robustly promoted its “narrative surrounding its priorities.”

Another Chinese replay of American history can be seen in its challenge to the global leader. Warns the Pentagon, Beijing is seeking “to degrade core U.S. operational and technological advantages.” America once enjoyed both rising population and productivity, moving it ahead of the then-dominant United Kingdom. Its world-class armed forces were forged in World War I and especially World War II, after which it achieved qualitative military superiority. America has held onto this advantage ever since, though at significant cost.

Not surprisingly, China’s advances are discomfiting to Washington. Still, the United States is starting from a position of unusual, unnatural dominance. Indeed, when the Red Navy rusted away in port after the Soviet Union dissolved, the waters up to China’s coast became a de facto American lake. Now, however, notes the Defense Department, “China increasingly seeks to leverage its growing economic, diplomatic, and military clout to establish regional preeminence and expand its international influence.”

There’s nothing nefarious about that. Shifting power balances are inevitable as nations rise and fall. Such changes do not threaten American security. U.S. influence, dominance, and hegemony, yes, but none of those is necessary to ensure American peace and prosperity. The United States grew dramatically while still an international nonentity. Washington’s increasing intervention in other regions actually put the country at much greater risk.

Some believe that China wants more than international influence. For instance, Steve Bannon has claimed that Beijing seeks to be “the global hegemonic power.” That’s possible, but he offered no evidence. Importantly, there is no ideological contest for hearts and minds, as during the Cold War. China has dropped the pretense of promoting communism; the party is just a cynical means for leadership to retain power.

Nor does Chinese foreign policy evince an appetite for global conquest. Beijing has grown more assertive, even aggressive, in its territorial claims, but all of those are historically grounded, even if legally unpersuasive. Virtually all the issues—Taiwan, the Senkaku/Diaoyu Islands, the Paracel/Xisha Islands, the Spratly/Nansha Islands—spring from the Chinese Empire’s extraordinary weakness. So far there have been no demands that threaten other nations’ independence.

Most important, China’s concept of “active defense” is primarily designed to frustrate U.S. intervention, not facilitate conquest of American (or other) territory. For instance, the Pentagon acknowledges that “PLA capabilities and concepts in development are strengthening China’s anti-access/area denial (A2/AD) and power projection capabilities.” Beijing is more interested in being able to sink American ships with missiles and torpedoes than produce Chinese carriers for an armada to seize Los Angeles.

Today, China has one full-length carrier and another two under construction—one of which the Pentagon expects to enter service later this year—while the U.S. has 11 carrier groups, plus other assorted ships with more limited aviation functions. That’s as many carriers as the rest of the world combined. While the Pentagon cites the additional carrier as evidence of the Chinese navy “gradually extending its operational reach,” it far more dramatically illustrates the continuing limits of that reach. However malign Beijing’s intentions, so far its capabilities are modest and growing only slowly.

Concludes the Pentagon: “China is advancing a comprehensive military modernization program aimed at completing modernization by 2035 and making the PLA into a ‘world-class’ military by 2049.” That second date is three decades away.

The longer the timeframe, the greater the uncertainty. Much could thwart Beijing’s plans between now and then. China has a rapidly aging population and a heavily indebted and state-corrupted economy. Internal social divisions are sharp and political challenges are immense, despite, or perhaps more because of, Xi’s extreme consolidation of power. Beijing has no genuine military allies and is surrounded by countries with which it has been at war in the past: Russia, Japan, Vietnam, India, South Korea.

Key to any potential Asia-Pacific war are intensity of interest and ease of deterrence. China’s stake in the region’s territorial outcomes is far greater than that of Washington. Moreover, it is a lot cheaper to sink a carrier than to build one. Thus does Beijing have reason to spend and risk more, and in doing so frustrate America despite the latter’s far greater power.

That’s bad news for Washington. The good news is that China’s smaller neighbors also can emphasize deterrence. A number of them have been building submarines, and American vessels are not their intended targets. Likewise, American policymakers warn about Beijing’s dangerous capabilities, but these are intended to combat U.S. activity in China’s backyard. Beijing does not pose an existential threat to America today. It is hard to imagine when it could do so, if the United States maintains even a fraction of its military forces.

Given that the bulk of our military outlays go to project power, not deter attack, how much are the American people prepared to spend to enable Washington to fight China over, say, ownership of Scarborough Reef, claimed by both Beijing and Philippines—which uses a half-century old Coast Guard cutter as its flagship? Is Washington prepared to wage nuclear war over Taiwan’s independence?

What to do with China may be the most important foreign policy question facing America today. Beijing poses multiple serious challenges to the United States, and threats must be contained and opportunities for cooperation created. However, Beijing is not an enemy and should not be treated as one. Doing so would very likely make it one. American policymakers need to recognize which of our mercifully few interests are truly worth fighting over.

Doug Bandow is a senior fellow at the Cato Institute and a former special assistant to President Ronald Reagan. He is the author of Tripwire: Korea and U.S. Foreign Policy in a Changed World and co-author of The Korean Conundrum: America’s Troubled Relations with North and South Korea.