This research paper aims to analyze the current US-China relationship in order to better understand whether China’s rise to power will be achieved through military engagement or if it will come about in a peaceful manner. This paper argues that a multipolar world order is plausible, but what remains uncertain is the dynamics and future implications of these changes for global governance. Power transition and Institutional theory, along with Graham Alison’s Thucydides Trap analysis, are highlighted to demonstrate the different schools of thought on the outcome of the US-China rivalry. Graham and Power transition theorists remain skeptical of a peaceful rise of China while Institutional theorists are more confident of the role international institutions will play in mediating conflict. Current events like disputes in the South China Sea, independence of Taiwan, role of multinational organizations and access to nuclear weapons are then analyzed through the lenses of these schools of thought. The paper emphasizes the possibility of military hostility between nations involved in the South China Sea dispute, because some of these nations are US allies, the US may engage in such a war with China in the region. Similarly if the Chinese desire for greater voting powers in current international institutions is not met, China may engage in creating alternative multinational organizations where it has greater influence, like the New Development Bank and Asian Infrastructure Investment Bank. This will considerably undermine institutional theorists' claim that international institutions will be successful in preventing conflicts from escalating into war. The paper also discusses the role nuclear weapons play in deterring war. The difference in both nations’ nuclear policy induces a competition between these countries to increase their nuclear capabilities, unlike the MAD doctrine adopted during the cold war.