I don't think the threat of nuclear weapons is all limiting, sadly. I don't think we should so easily dismiss large scale war or even the use of nukes. China knows that if it nukes the US mainland that China will cease to exist, and the US knows that if it nukes China it would be very damaged, radioactive, and many millions of people short, so what could make any of those countries nuke each other? There's no point, they might as well nuke themselves – they won't launch unless someone is launching at them.
If a regional conflict in Southeast Asia drew in US hardware and personnel to duke it out against China or India, I don't think it would escalate into nuclear exchange unless one side thought it were about to be attacked by the others' nuclear force. And even so, a tactical exchange shouldn't necessarily lead to a strategic exchange. So as long as one side isn't backed into a military corner under a terminal threat what prevents large scale exchanges between modern forces, necessarily? I think there could be war over a limited area. Weapons systems would poor in from different forces and fight in modern ways, but that shouldn't lead to beach landings in Seattle or Tianjin.
I think a defense of Taiwan would be enacted by the US if it came to it, and once the world got there I think both sides would be saying, let's not let this get out of hand. To the Americans is a free Taiwan worth the loss of its homeland and millions upon millions of its people? No. Neither is its gain worth that risk to the Chinese. ICBMs wouldn't be used. But MAD theory aside there are many reasons why large countries wouldn't want to total war with each other, and I'm not saying there is a good chance of it happening in the next decades militarily anyway.
What I do see happening, if anything, which might be this century's method of conquest, is a rich country putting on a small country so much economic pressure that the country appeases the large every time it comes knocking. For a country like Vietnam, imagine its sternly holding its own against the Chinese in its dispute over oil. Vietnam is guarding its exploration with navy ships. China doesn't want a shooting war but it will have its oil, so it begins to buy up everything public. China directs its companies to buy everything for sale on Vietnam's stock market, its development land, its contracts. Everything Vietnam exports, China directs its companies to export the same thing at an artificially low price, even if the products take losses. China agrees to sell most of everything back, because it doesn't want the products in the first place, in exchange for the permanent oil rights to the area. If China were malicious and calculating enough, it could enact policies and make transactions to ruin a small economy, even if it also hurts China. This would be an act of aggression, and though no shots might be fired would still produce the same consequences. It could also be used as a threat.
Most humbly,
-Armored A. Prispiam