Due to the rapid growth of Chinas national power, the so- called "China Threat" has become an important issue since the late 20th century. It involves academic debates not only over power issues, but also over issues on American diplomatic policy, especially toward the Taiwan Strait. Employing the theory of security dilemma, this paper first analyzes and evaluates the rise of China and addresses two questions: "How fast are China’s economic and military capabilities increasing?" and "How should the world, especially the United States and Taiwan, respond to this emerging great power?" Secondly, it is believed that the security dilemma should be measured more broadly and some factors, such as nationalism, need to be taken into account as well. It is clear that the dynamics of the security dilemma in the Taiwan Strait are uniquely complex. The interests rivalry that has reemerged in the Taiwan Strait since the 1990s seems to be a classic example of the security dilemma, illustrating why some are worried that the growth of Chinese military power and the reactions to it would result in dangerous balancing behavior and would increase the chances of military conflict. Finally, this paper offers some suggestions to the further relaxation of the security dilemma across the Taiwan Strait.