You're right, war is less likely among nations with strongly linked economies. The important thing to note is that, at the same time, the survival self-interest of a county to dominant the other does not go away.
Which means that economic interdependence only helps avoid war so long as war itself doesn't provide more benefits.
China loved the idea that was popular in the the US of "peaceful" rising China, it meant people ignored the long term strategic threats militarily.
China has risen economically, and now they are aiming to have a military more powerful than the U.S.. They are also growing their influence in South America and Africa to get new markets, resources, and ultimately get rid of the dependence on the US market.
So, the dependence helped deter war in the short-term, but the economic gains let China position them better to serve the self-interest of being dominant.