US notice of impeding abrogation of the ABM Treaty and the development of Ballistic Missle Defenses (BMD) has generated great concern in Beijing. China’s small nuclear arsenal capable of striking the United States will be put in jeopardy, giving the United States a freer hand in Asian and worldwide affairs. Despite the growing cultural and economic ties between the two nations, BMD is adding tension to this very important bilateral relationship, with significant consequences for regional and global issues. With some form of a BMD system all but certain, China considers its next steps.