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When the world's most populous nation, commanding ample resources and a booming economy, begins to strengthen militarily, it cannot help but draw attention to itself. China has indeed done so through naval expansion in recent years and the upgrading of all aspects of its forces. While it has reassured the world of its peaceful intentions, speculation as to its motives is understandable. Intentions may, of course, be inferred from capability; but most strategic analysts recognise that capability alone is not enough. Rather than focusing on capability, this paper subscribes to the view that intentions are better understood if examined within the context of culture and philosophy. Moreover, as the central concern over China's changing military profile is one of the implications of expanding national power, Chinese perceptions of power need to be addressed. The findings can be thoughtprovoking: If it is a truism that power corrupts and absolute power corrupts absolutely, how does this rest with the traditional Chinese conception of power as virtue? Will the world, under the influence of stronger Chinese leadership conditions in the 21st Century, be assimilated into an alternative power system - a 'power politics' of virtue? This question issues from the discussion in Part One (previous paper) of the Daoist perspective of international relations. It concludes with the weight of cultural-philosophical evidence in favour of responsible statecraft on the part of the world's biggest and potentially most influential nation.