The Cold War taught us that inefficient planned economies can execute priority projects well. Think Sputnik, the Moscow Olympics, and Russian nuclear physics. Although its output never reached half that of the U.S., the Soviet Union held us to rough military parity until the end of the Cold War.
China will choose a new leadership in 2012, culminating a power struggle between reformists and those who favor a return to neo-Maoism. If the latter group prevails, the level of hostilities with China will intensify beyond their current uneasy status quo.