China's rise is a defining political event in world politics in the twenty-first century. As David Shambaugh, a leading China scholar, puts it, “the rise of China is the big story of our era.” Scholars and pundits heatedly debate over the implications of China's rise in international politics. Pessimists, mainly realists of different stripes, suggest an inevitable conflict between a rising China and the United States – the existing hegemon – in the international system. Optimists, largely from liberal and constructivist schools, argue that China can be either integrated into the exiting liberal order or socialized by the prevailing universal norms. Challenging these two arguments, this chapter suggests that China's rise is a bargaining process between China and the outside world, especially the United States. Neither the optimistic nor the pessimistic view is warranted, since the final episode in the drama of China's rise is still unwritten. Depending on how China bargains with the outside world and how the outside world reacts, China's rise may lead to either a peaceful accommodation or a violent conflict.

From a rising power's perspective, bargaining for a peaceful accommodation is the Pareto-optimal outcome, since war or conflict is less efficient. From an existing but declining hegemon's view, accommodating a rising power is also a rational decision, if the benefit of accommodation outweighs the cost. However, as T.V. Paul wisely suggests in Chapter 1, “non-violent accommodation is a rare event, as rising powers are often not peacefully integrated by established powers.” Building on rationalism and constructivism, and borrowing insights from bargaining theory's framework, this chapter explores different strategies that a rising power can use to achieve a possible peaceful accommodation to the outside world. Although a rising power's strategy is by no means the only determinant, I suggest that how a rising power behaves is one of the most important factors in shaping the final outcome of the power transition process in the international system.

This chapter has three sections. First, I discuss two types of accommodation and four strategies a rising power can adopt in bargaining for peaceful accommodation. Second, I explore how China employed these four strategies to reach bargaining deals regarding the Taiwan issue, territorial disputes in the South China Sea, arms control regimes, and anti-separatist movements in Xinjiang after the Cold War.