"what would be an appropriate counter-strategy to address the balance of power?. It seems to me that the remaining options are very limited and most include military action, so "first strike" anyone?"
Are you crazy????
A nuclear war - just what the world needs - not now, not any time..........................
As a number of posters observe countries rise, countries fall - it's the way of the world and generally the causes are far far deeper, and far longer in gestation than a few years. In the long haul the last 100 years of China NOT being a great power is the odd period.