Don't forget you are thinking the same way Europe thought about Japan pre-WWII. Big shock when things went South that Japan wasn't as backwards as previously thought...
Much of China's ecomomy is based on exporting goods and they feel that they need a navy to both protect the shipping in and out of China and to protect their coast line. Without their huge export market their economy is in troutble and their government is in trouble. Right now a sea blockade would be a problem they could do little about.
...and the Spratly's, and that larger Island Japan, and the need to keep the energy and raw materials flowing. Unless Taiwan does something rash, that has to be low on China's list.