I agree that China can't project military force far outside China. But they don't have to, a large portion of the world's population and manufacturing capacity is in their neighborhood. If they take over Taiwan, occupy Vietnam and get countries like Laos and Thailand which have good relations with China on their side, then other countries might join against China to protect their interests and supply lines.

Meanwhile the US has failed to roflstomp much smaller and weaker countries that didn't prepare for this exact scenario. China can't take the war to the US, but they can defend their costal waters and core territory longer than the US can maintain popular support for a war.