The Chinese Air Forces (including naval aviation) have shrunk in the last ten years. Personnel shrank by 25 percent and aircraft by 50 percent. This was a big step forward. In 2000, some 95 percent of the 3,200 fighters were copies of Russian designs from the 1950s (MiG-19 and MiG-21). Over half of these relics have since been retired, allowing the air forces to shrink personnel by 100,000 troops. Now, about a third of the fighter force consists of modern aircraft (Su-27/F-16 class stuff).
Bombers and support aircraft have not improved as much, but China now has more modern air-to-air missiles, and locally made smart bombs (which are not particularly high tech, but work.) More importantly, pilots are getting better training. In addition to effective, locally made, flight simulators, pilots are getting nearly twice as many flight hours compared to a decade ago. Ground support has improved, and is better able to provide surge (providing maintenance, refueling and rearming for many sorties in a short period of time) capabilities.
Anti-aircraft defenses have been greatly increased, with dozens of Russian S-300 batteries in service, and a slightly less capable Chinese made system in service as well. Both of these systems are roughly comparable to the U.S. Patriot. Chinese Internet based espionage is believed to have stolen much U.S. electronic warfare and weapons technology, making it harder for the U.S. to penetrate Chinese air defenses.
China has also increased its capability for delivering airborne forces, and supplying them via parachute. The navy has received two generations of new anti-ship missiles in the last decade, and more are on the way. Chinese air transport, in general, has more than doubled its capacity in the last decade. On the ground, the air forces are much better at handling logistics, especially the rapidly growing inventory of spare parts.
Chinese use of military space satellites has greatly increased, including a demonstrated ability to destroy satellites in orbit. China has greater ability to launch satellites, and a much larger force of ballistic missiles (mostly shorter range stuff, meant for neighbors like Taiwan, Japan, Russia or India.)
Given what China has done with its air forces in the last decade, and their continued work to improve their capabilities, we can expect China to be even more formidable by 2020. Not a match for the United States, but certainly a formidable foe, and eventually a dominant one.