Chinese views, among the national leadership, are often not the same as those we attribute to them. For example, India is not perceived as a major rival, unlike Japan or the U.S., They don't believe war with the US is likely, unless we mess with Taiwan. They believe the experience in Bosnia and Kosovo indicate America understands "political warfare" much better than China does. And they don't seem to think we're "bogged down" in Iraq so much as that we're gaining valuable combat experience (maybe a million "seasoned" troops by the time it's over) as well as learning all sorts of new tricks in how to fight insurgencies, and how to use new military technologies.
The problem is that the Chinese leadership, in self-defense, have been using nationalism, and "big-bad-America" to distract the people from the corruption and other failings of the government. Don't confuse the propaganda and hype with what the leadership really believe, and talk about among themselves.