China is one of my only areas of expertise, hehe.
I think that China's growing economic and political influence is pretty evident. You won't find academics debating that China is a rising super power. However, I think the West views China very differently than China views China. There's a saying--and I'm paraphrasing, because I don't remember it exactly--that goes something like this: in response to the claim that China is "Fragile Superpower," the West asks, "What fragility?" and China asks, "What superpower?" Our perception of China is that it is increasingly powerful; China's perception of China is that it is increasingly unstable. (For evidence of the phenomenon, consider how it has responded to the Jasmin Revolution).
Will China ever outweigh the U.S.'s counter balance? I think that it has the potential to, if it continues to liberalize its economy and address some of its social challenges. Longforge is correct that overpopulation is a serious problem for China, because it leads to high levels of unemployment, lowers the minimum wage, consumes limited resources, etc. Moreover, China's populace is aging and there is no social safety net, which will lead to obvious challenges. The PRC is also famously bad at innovation: they much prefer to steal Western technology, which puts them always a step behind. Still, I do not think that it is fair to catagorize China as a "communist" nation. They have been on a steady path toward liberalization since the late 1970s. Their economy has averaged staggering GDP growth as a result of these reforms. Even during the economic downturn (when America's economy shrunk), China's GDP growth continued to hover around 10%. Pretty astounding.
That said, I do not see China ever superseding the Western system as a whole. Western nations have successfully drawn China into the Western system, complete with all of the restrictions and expectations required of the system. The more invested China becomes in this system, the more it demonstrates its willingness to abide by liberalized norms. Consider how hesitant China has been to offer dissenting views in meetings of the UN Security Council.
In sum, I do think that China has a lot of potential, but I do not think that the fight is over. It's still anybody's game. How will the West deal with its problems? How will China deal with its struggles? The answers to these questions will likely determine the outcome.
