China hasn't fought any wars in a long time - I don't think they've ever fought in a naval battle. I don't know if they have any idea what real combat is like. I realize they are a near parity rival and have some systems that from what I understand are quite good. It would not surprise me to find out that China is a paper tiger.
The long and short of it though is economically China can't afford to go to war short term gains maybe, long term defeat. They will posture and bloviate but in the end they will always back down.
Lots of times big guys don't know how to fight, everyone doesn't mess with them because they are big thus they never learn how to fight - this is China. The US on the other hand is a big guy who knows how to fight as we are always warring with somebody
Don't forget the Chinese did a good job of fighting in Korea after defeating the Nationalists, and against India. They are no paper tigers.