The DoD just published its annual report on the state of China’s military (PDF). It’s fascinating reading. The issue of Taiwanese independence continues to be of paramount importance to China and drives much of their military effort. This, in combination with their concern over a remilitarized Japan (which is very understandable), throws interesting light on the Korean Peninsula semi-crisis. It’s clearly important to take China into account when considering Japan’s response to North Korean saber-rattling.
There’s also the question of how quickly China would move on Taiwan if the US was ever unable to defend Taiwan. Answer: very quickly. Getting caught up in a war on the Korean Peninsula could be very damaging to Taiwanese sovereignty.
Overall, China’s military is fairly backwards, although large. However, they seem to have a fairly solid idea of where the problems are and are very interested in fixing those problems. Read at least the executive summary.