Analysts and policy makers articulate growing concerns on whether China's rapid rise will remain peaceful or become confrontational. To understand Chinese grand strategy, this paper draws on its long history and classical thinkers to offer four main arguments. First, China is highly sensitive to its periphery (that is expanding), where it demands preeminence. Second, the measure of internal stability within China has major bearing on its strategic conduct. Third, traditional Chinese caution for strategic overreach is changing, as it projects interests in distant continents, albeit, with greater emphasis on diplomacy and trade. Fourth, reclaiming the status of a great power by rectifying the failings of initial encounters with the West is a dominant motive, in China's changing strategic calculus from national interest to international influence. In keeping with the growing influence, the Chinese leadership has proposed an alternative paradigm for international order called 'harmonious world', based on the Confucian principle of guanxi of multiple layers of relationships. Past conduct however portends fault-lines in harmony in the periphery, where cracks in China's internal security overlap with competing spheres of influence, raising the specter of confrontation involving potential allies of the United States.