China leverages its vast market power to coerce American high tech companies to provide it with the latest technology if they want to conduct business in the People's Republic. China's power is market power, it is the power to request that Google censor news that is harmful to the Communist Party. It is the power to ask Hollywood studios not put the small flag of Taiwan on Tom Cruise's bomber jacket in the new Top Gun movie. The Chinese now have more supercomputers than the United States (188 to 122), and for a few years, they had the fastest supercomputer in the world. These computers allow nations to simulate everything from the weather to nuclear detonations.
At the end of the day, China understands better than anyone that control in the future is control over information, not tanks, aircraft carriers, or nuclear tipped ICBMs.