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This study especially concerns the causal relationship between official defense expenditure and economic development for mainland China from 1953 to 2007 by employing a combination of VAR models and the Granger Causality Test. The final conclusions are diverse in varied time periods where no evidence showing the Chinese economy had an effect on its military development or the reverse. Nevertheless, military spending benefited the economy after 1989 when the development of defense was running on a new path. This study also includes a proxy series of Western estimated data, say SIPRI, which has a result that resembles Chinese official data over the period 1989–2007.

The world is in a cold peace which is peace without being secure. At the heart of the cold peace is the competition between China and the USA. The cold war will not return because the old and new great powers simply are not as powerful as the old duellers at the start of the cold war. Other important powers, like the EU, Japan, and Russia, have significant roles in determining the outcome.

However, the intense competition between China and the USA has dire consequences for the future of humanity. It fuels nationalism and xenophobia and makes them less capable of addressing domestic issues, such as inequality, misinformation, ageing, etc. It also dims the hope for meaningfully tackling global issues like global warming, which requires a global innovation and mass production system to change the fundamental calculation of economic development and climate policies.