Flash,
No doubt you have loads more timely info, but the one thing I've heard several different places (in both class and unclass sources) is that the real threat that China has is time. They see things in a much longer timeframe than the west does, especially the US. At least Europe has a longer history, but they're not really threatened right now. The U.S. sees things in such short term ideas, but the Chinese are patient and in it for the long haul. An example of this is Taiwan. In China's eyes, they will get Taiwan "back," it's just a matter of waiting for the right time, be it a decade or more.
As for threat, and not that you'd answer, I'd say econonmy?
Sure China has time, but who says the Commies will stay in power and China will stay in peice? The Communist Party of China has use authoritarian means to keep its grip on power and that may or may not continue to work. The PRC has several very serious problems, like the fact that fully 1/3rd of the country does not speak Mandarin as its primary language
http://www.cnn.com/interactive/specials/9908/china.glance/maps/images/language.map.gif . Its economy is becoming increasingly reliant on imported energy, going from being self-sufficient in oil to importing about 40% of its oil supply in less than 15 years. And most of that energy comes from Central Asian republics that were once part of the USSR, and the Mid-East and Africa. None of them are guaranteed to always be so friendly to China. In contrast, the top two foreign suppliers of oil to the US are Canada and Mexico, both reliable allies.
Other possible problems include a growing imbalance of the male to female ratio (fewer women), an extremely large migrant population estimated to be about 100 million, and rising discontent in the countryside:
http://www.csmonitor.com/2004/1122/p01s03-woap.html and
http://www.atimes.com/atimes/China/FK16Ad01.html
As for their military, sure they have a lot of toys.....like I keep saying......BUT, how well are those pretty Flankers going to be maintained by conscripts from the countryside? How well can their Sovremennyy's and Kilo's be operated if the crews change over completely every year or two (conscripts again)? Do they have the logistics expertise and the infrastructure to mount large scale operations to take over Taiwan, much less threaten their other neighbors? If their economy is reliant on exports, how well will they fare if their ports are mined and blockaded?
Someone to keep an eye on, of course. Long term threat to the US, probably. But do they have a whole lot of their own problems, on a much bigger scale than we care to imagine, yup.
As for the threat that makes me worry at night, try this:
