China lives in a fairly tough neighborhood. It shares a border with Russia, North Korea, India, and Vietnam. South Korea, Taiwan, and Japan are also close by the Chinese coast. According to Global Firepower's ranking of military power, four of these nations (Russia, India, Japan and South Korea) are among the top 10 most powerful militaries in the world. Taiwan falls in the top 20 and Vietnam comes in at 23rd. China can only count the troublesome North Korea as an ally, though it does have good relations with neighboring Pakistan, Kazakhstan, and Myanmar. (In contrast, the United States borders Canada, ranked 16, and Mexico, ranked 33rd. Among the top ten most militarily powerful nations, 6 are close allies of the US.)
Not only are China's neighbors well armed, but there is a history of armed conflict between them and China. While most Americans are aware that China was North Korea's ally in the Korean war and may be aware that China was invaded by Japan in what would become World War II, but many are not aware that China has had conflicts with other neighbors since then. China has fought wars with India in 1962, with Russia (the the Soviet Union) in 1969 and with Vietnam in 1979. Of course, China has an ongoing dispute with Taiwan over its de facto independence, a subdued dispute over its annexation of Tibet, and administers a portion of Kashmir. In short, China does not have to look far to find security concerns, even if the United States wasn't in the picture.
Among all the regional threats it faces, in many ways, Japan looms the largest. While the United States may be China's biggest military threat or rival, Japan is the traditional enemy. From the typical American's point of view, World War II started with Pearl Harbor, but, from the Chinese point of view, the War of Resistance Against Japan had been going on for 3 1/2 years by December 7th 1941. Though estimates vary, Rana Mitter estimates that 14 million Chinese died in the war and a news article in a 2005 China Daily article cites a figure of 35 million Chinese dead and wounded. Also, there is little dispute that the Japanese committed many war atrocities. Indeed, the photos taken by Japanese soldier are still circulated on Chinese websites.
In his 2020 book, Modernizing China's Military, David Shambaugh argues that anti-Japanese sentiment runs deep among officers of the Chinese People's Liberation Army (or PLA):
The anti-Japanese sentiment one encounters among the PLA at all levels is palpable. Distrust of Japan runs deep, transcends generations, and is fairly virulent among the generation of PLA officers in their forties and fifties. Japan stimulates an emotional reaction not evident even in anti-American diatribes. In conversations with PLA personnel, Americans are regularly subjected to the view that the United States is naïve to consider Japan as an ally or partner, and they often counsel the United States to be wary of Japanese intentions and military ambitions.It is interesting to note that the virulently anti-Japanese "PLA officers in their forties and fifties" would now be in their 50s and 60s which is generally the age of generals in the military. For instance, China's Minister of Defense, Chang Wanquan, is a general who was born in 1949, making him about 65 years old. You will also notice that the Minister of Defense is not a civilian, as is the case in most Western nations. While one might be tempted to dismiss Chinese concerns about Japan's military ambitions as overblown, one cannot deny that they exist, especially in the Chinese military.
One might also ask how overblown those concerns are. Despite its constitutionally mandated pacifism, Japan is one of the top ten nations on Global Firepower military power index. With an economy only a bit smaller than China's, it could spend as much as China on its military and its ties with the US ensure that it would have access to the best technology available. Not to mention, the Japanese are no slackers when it comes to producing high technology themselves. Therefore, it is probably not much of an exaggeration to say that the only weapons the Japanese don't have are the ones they don't want.
Furthermore, the Japanese appear to have been edging up their military capabilities over the past few years. Nothing illustrates this better then the picture below that shows the latest two generations of Japanese "helicopter destroyers" side by side. The smaller ship is the DDH-181 Hyuga class ship (of which Japan built two, commissioned from 2009 and 2011) and the larger one is the DDH-183 Izumo class ship (which is to be officially commissioned next year while another ship of the class is currently being built).
One would be excused for commenting that these ships look very much like aircraft carriers, or what passes for them in navies other than f the USN. While the Japanese claim that these ships are for anti-submarine warfare, it is not hard to imagine that they could be used for amphibious or strike operations with some modification and the acquisition of the right aircraft (say the V-22 Osprey and the F-35B, though there are some technical complications involved in using the latter). As it stands the Japanese are already embarking only half as many helicopters as these ships can accommodate, thus keeping a good amount of capacity in reserve. Also, it is worth noting that all the European navies combined only have four carriers between them (though the British are working on two more). [Okay, this is just one weapons system, but I think it gives you a better visceral sense of Japanese modernization than simply quoting a defense expert or citing planned Japanese military purchases.]
Of course, one sticking point with the carriers is that, by law, Japan is not allowed to have "aircraft carriers", hence the name "helicopter destroyer". But, one look at these ships and the growth in size between the two classes of ships suggests that the Japanese are either fudging their law or hedging their bets against a future change in it. If you are a Chinese general ( they don't have admirals or a separate navy for that matter), you probably see this as proof that the Japanese are not constrained by their laws as much as they claim and are a growing military threat that might grow faster in the future.
Then, there's the US. As the largest military in the world, the US must be reckoned with, and that reckoning has become increasingly difficult over the years. Suppose you were General Chang Wanquan. When you started your career in 1969, the US was embroiled in Vietnam and the North Vietnamese were able to put up a good fight. US air power was fierce some but Russian supplied surface to air missiles and fighter aircraft put a serious dent in it (there actually were North Vietnamese aces in those days). Vietnamese ground forces took disproportionate casualties, but, again, they could inflict enough casualties on US forces to eventually make the US go away.
In general, this boded well for China's defense strategy which was based on Mao's concept of a war of resistance. This plan relied on what is known as strategic depth and involves retreating in the face of a strong invading army to draw them into the interior of the country. Then, when the enemy is weakened by long supply lines and the demand of holding large amounts of territory, harassing attacks are used to sap their strength. The when the enemy is weakened enough that they begin to pull back, an all out offensive is launched to drive them out of the country. With many technical variations, this was the general plan and the Chinese prepared for it by amassing a large cheaply equipped military with and even larger reserve force, distributing forces around the country with the intention that they fight were they live, and locating strategic industries and military resources in the interior of the country.
For twenty years, this is more of less the plan and, though there are increasing concerns about the technological inferiority of Chinese weapons, it seems like a workable plan. Then, in 1991, the plan goes to hell when the US blows through Iraqi forces, which were better equipped than most Chinese forces, in Operation Desert Storm. So, when Chan Wanquan becomes a Division Commander in 1992, the PLA is in the process of rethinking its doctrine and coming to terms with the fact that it needs to modernize its weapons systems and forces. (Shambaugh, 2002, p. 69-74)
In 1999, when Chan Wanquan was a Major General directing the University of National Defense, the NATO air war in Yugoslavia, provides more sobering lessons. Western air forces appeared to be able to obliterate air defenses better than those possessed by China and to attack targets with long range precision guided weapons with impunity. This rendered the concept of geographic strategic depth as meaningless and provided a chilling example of what the US and Japan might do to China if it invaded Taiwan (Shambaugh, 2002, p. 74-76).
At the same time, China's rapid economic development has changed the nature of what the PLA has to defend. The growth of the Chinese export industry has shifted manufacturing, and much of the population, from the interior of China to coastal regions. The need to import large volumes of industrial import and export equally large volumes of export overseas means that the PLA can no longer be content with simply defending China's borders, much less do so with a plan that involves retreating to the country's interior (tough that plan was dropped in the 1980s).
Of course, the US has arguably not fared so well in Afghanistan and Iraq. However, the difficulties that the US faced in fighting a counterinsurgency campaign, which would have been very heartening to the Chinese when they were planning to fight a protracted war of resistance back in the 1970s, may be of little comfort to them in their current situation. Indeed, the demonstrated difficulty of counterinsurgency might be downright chilling if the PLA considers the possibility of occupying Taiwan itself. Furthermore, if one focuses on the early more conventional phases of the war in Afghanistan and Iraq, the US demonstrated an increased ability to rapidly rapidly government military forces with relatively few ground forces of its own. This might suggest to them that, even if they took Taiwan, they would not be able to keep it for long.
The overarching point here is that, even though the Chinese military has been modernizing and developing new capabilities, the bar they need to jump over has been rising as well. Though their military capabilities have been increasing, both the demands placed on it (in terms of what they need to defend) and the militray capabilities of potential opponents have also been increasing. It is hard to say whether their capabilities have lost or gained ground on their security demands and potential opposition. In that context, the prospect of a US pivot towards Asia is probably a fairly frightening thing to China's defense planners and this is something to keep in mind as you interpret Chinese actions.
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