We're actually capable of producing a lot more food, if we switch production from animal fodder to grains. But it'd mean less beef on your table.
There are many environmental problems that will cause eventual reduction in food production. Water shortage, soil erosion, declining petrol supplies (used for fertilizer), loss of farmland to urban sprawl, pollution, heavy metals, etc.
Unfortunately, as a manufacturing power house, China is stuck with these problems. Manufacturing consumes a lot of water and output pollution en mass. You could reduce the pollution output, but not get rid of it completely. The only way to truly reduce pollution is to shift manufacturing to someone else's backyard and let them deal with it.
I recall back in 1970s, Taiwan's rivers were so polluted that they were basically open sewers. Entire river was black in color. Taipei city had open sewers everywhere. Over the last 20-30 years they've done a good job cleaning up. Now the rivers and even some sewers can support fish (tilapia) population. But this is also because much of Taiwan's polluting manufacturing industry was moved to China/Vietnam/etc.
Consider the irony of a consumerism society. The government requires its citizens to have unlimited material wants (well above "needs") and buy lots of stuff to stimulate the economy and roll coins into tax collection. The more we consume, the stronger the economy -- at the cost of putting additional strains on the planet. But if we all decide to ditch consumer lifestyle and adopt a minimalist lifestyle to have least impact on the environment, the government would prolly go bankrupt.
In that perspective, a new & popular hippie potato-farmer movement would be more dangerous to the American government than Iraq. As long as American citizens continue to consume vast amount of resources to generate economic prosperity, the government can afford its $500 billion military and blow away Iraq 10 times over. But if majority of Americans decide to ditch their jobs and become potato farmers, it'd be the end of America as a world power.
It's a simplistic way to view things, but if you want a good indication on if China (or any other country) is a "power", one merely has to look at how much resources it consumes.