This thesis analyses how China’s economic rise challenges United States hegemony in the global political economy. The aim is to examine whether China’s rise represents a broader shift in the balance of power between the two states. The thesis adopts Kenneth Waltz’s neorealist framework, which understands the international system through the relative distribution of states’ overall capabilities. Methodologically, the thesis uses a qualitative comparative approach, comparing China and the United States across economic, technological and military capabilities, as well as political competence, political stability and geography. Quantitative indicators, including GDP, trade, manufacturing, R&D expenditure, patents and military expenditure, are used as secondary data and interpreted qualitatively rather than statistically. The thesis finds that China has significantly strengthened its relative position, particularly in production, trade, technological development and regional military capabilities. However, the United States maintains important advantages in economic development, advanced technologies, military power projection, dollar dominance and geography. The analysis also demonstrates that political competence and stability influence how effectively both states maintain and use their capabilities. The thesis therefore concludes that China’s rise represents a significant but incomplete shift in the distribution of capabilities rather than a complete transition of hegemony.