China is:
A: Outstripping the USA Economically and Industrially
B: The US capability for military force and economic dominance on world markets is giving way to China at what is best described an Alarming Rate (USA falling while China is rising = high closure speed)
C: The Chinese build up is yet to come, as previously stated their military is simply going through preliminary stages similar to that which took place in the USA in the 1940's and 50's. give them 10 years or so and they will begin the new generation, and with all that research, manufacturing and money behind it.... thats a big build up.
and of course
D: If it does degrade to a simple war of Attrition, the Chinese will win CONVINCINGLY.