Yang Jiechi is a name that's not likely to be all that familiar to Australians. It should be.

He is the man who crafts China's image to the world. Yang is a former foreign minister and now one of Xi Jinping's inner circle, as Director of China's Foreign Affairs Leading Group.

Here's an insight into how he thinks. In 2010 he issued a warning to other Asian nations: "China is a big country and you are small countries. That is a fact."

Message: know your place.

This is a long way from the motto of former China leader, Deng Xiaoping: "Hide your capacities, bide your time."

The era of hide and bide is over.

China is by some measures the world's biggest economy. It has the world's largest standing army.

China is the world's leading manufacturer and exporter.

It is the only nation that can plausibly challenge American global dominance.

This has some fearing Thucydides' trap. What is that? It is a lesson from the Peloponnesian War, when the Ancient Greek historian Thucydides said the fear of the rise of Athens made war with Sparta inevitable.

Since then it has become shorthand for how a rising power threatens an existing order.

Xi Jinping is perhaps the most powerful man in the world. ( AP: Li Gang )

Can we escape Thucydides' trap?

In World War I it was Germany versus Great Britain; now it is China versus the United States.

Defence strategist Graham Allison calculates that in 12 out of 16 cases since the 1500s, geopolitical rivalry has ended in war.

Mr Allison says the "defining question of the global order is whether China and the US can escape Thucydides' trap".

Mr Allison believes war is not just possible, but more likely than we realise.

Journalist Richard MacGregor has extensively covered the Asia region. In his latest book, Asia's Reckoning, he walks the region's fault lines.

He says historical enmity between regional powers China and Japan could escalate into full-blown conflict. It would drag in the United States and Australia.

MacGregor quotes an old Chinese idiom: "Two tigers cannot live on one mountain."

War, if it starts, would be triggered by disputes over territory both between China and Japan, and in the South China Sea.

China has already reclaimed land, and built runways and harbours potentially to deploy fighter jets and warships.

Global think tank the Rand Corporation has already war-gamed a major conflict in its report War with China — Thinking Through the Unthinkable.

Fought today, Rand believes, the US would prevail, but it would be bloody and unpredictable.

China says its rise is peaceful

Of course, this is the worst-case scenario.

China has always argued that its rise is peaceful.

It is the world's engine of economic growth, and its hunger for resources has made it Australia's biggest trading partner.

Underlying weaknesses in China's economy will spark political upheaval, Gordon Chang says.

China has become more linked to the global order. It is a permanent member of the United Nations Security Council and a member of the World Trade Organisation, and it contributes to peacekeeping operations and provides humanitarian relief for the world's crises.

A year ago at the Davos meeting of the world's powerful, President Xi Jinping pledged to be the champion of globalisation and international trade.

This year, Chinese state news agency Xinhua published an editorial saying the world needed to choose between "two fundamentally different outlooks … self-centred America first … or Xi-style collaborative approach".

There are those who believe China will collapse before it leads the world.

China watcher Gordon Chang says the Communist Party is ill-equipped to deal with an economy that is hitting the limits of its growth.

He doesn't accept the official figures and says there are underlying weaknesses that threaten not only the country's wealth but will spark political upheaval.

Certainly, China is facing a debt crunch. Problem loans have doubled in just two years, and an increasing number of Chinese firms owe more in interest than they earn after tax.

It requires more credit to generate shrinking growth.

Defying the lessons of history

But the Communist Party has proven extraordinarily resilient and innovative.

China is attempting a high-wire act: maintain a one-party state, tightly control political freedom and liberalise the economy.

It defies the lessons of history.

But, history hangs heavily over the entire China story. Will history — the lessons of Thucydides — lead us to global war?

Will that war be sparked historical enmities between China and its Asian rivals?

Understanding history is key to understanding China.

The country's leaders remind their people of the "hundred years of humiliation" by foreign powers.

Nationalism is the Communist Party's trump card.

Years before he was supreme leader, Xi was on an international tour at a time when China was accused of manipulating its currency and distorting world trade.

In Mexico, Xi lashed out: "China does not export revolution, hunger or poverty … there are a few foreigners, with full bellies, who have nothing better to do than try to point fingers at our country."

Now, Xi is perhaps the most powerful man in the world, and pointing his own finger.