If China decides to attack, they really won't do much damage. We have far greater technology, and our industrial capacity is second to none.
China is finally industrializing, however, the fact remains: China has over 800,000,000 people who are peasant-class. Their economy is still in shambles for the most part, and they really don't have much in the way of infrastructure (though cities like Shanghai and Beijing are improving).
Our military isn't as large, but we have many more weapons, our air force is superior to any other in the world (China still uses MiGs), and we have a navy that China couldn't even hope to out-class.
The Chinese government may want a war, but the Chinese people don't, and I am sure of this. Remember, they are still oppressive Communists.