Oh yeah, they are going to squander it. Sometime between 2026-2032, they are going to attempt to take Taiwan. It’ll be a bad war — though not WWIII — and in the end, a coalition of US, Japanese, South Korean, Vietnamese, Taiwanese, and Thai forces will drive the the Chinese back and defeat them after taking initial heavy losses. But it’ll be 2-3 years of constant grinding mostly-naval and air war — and in the meantime, strategic targets in the US will be struck with Chinese missiles and, sometimes, drones.
It’ll be a conflict like we have not seen before. I mean that in the most literal terms. The generals are always fighting the last war, but this will be something wholly new. The part I mentioned about striking strategic targets in the US? Those targets will be announced 30 minutes or an hour in advance so they can be evacuated and then struck. They will be immobile, hard targets like power plants and manufacturing facilities.
In the end, the war won’t go nuclear as the allied coalition won’t attempt to do something so stupid as putting boots on the ground on the Chinese mainland. I predict ~300,000 casualties on the US-allied side with 40,000 KIA. For the Chinese, I’d guess 800,000 casualties with 150,000 KIA.
I assign the above war a 60% probability. It will lead to China’s decline and retreat from the world in many important ways.