Based on my admittedly limited understanding, the Chinese could hit us badly if they really wanted to.
Sure, economically. They own a good percent of our debt, but not enough to ruin the US. Cause significant disruption? Sure. Cyberwarfare isn't quite a joke, but it's awfully close. They again could cause significant disruption. But crippling US infrastructure completely is the stuff of bad novels. Every second of every day, anything connected to the internet is potentially getting hit by hackers across the entire planet. China could certainly slip in stuff at the chip level. But even the NSA would be challenged to backdoor even a significant percent of equipment via embedded backdoors. Onesies, twosies? Absolutely, happens all the times. Systematic backdooring of most major equipment? It'd require coordination that'd be noticed, and word would leak. It'd be a hundred times larger than the Manhatten Project in total.
Their Navy is extremely limited, our's could sink their entire fleet in days or less. They could sneak in with cargo ships, but even Q ships wouldn't do well against any modern Navy once they discharged their cargo. Suppose they landed even a couple divisions in California through Washington. The US Navy would slam the door behind them, and within couple days to a week they'd have the entire US Army on their doorstep. They could commit wide scale competent terrorism, use nukes as blackmail, etc. But Americans tend to get pretty bloodthirsty in a hurry. There's no way China could hold any part of the continental US.
Other reason is, why would they want to? They're making money hand over fist from us, rapidly modernizing their country. While we're politically stagnating, they're unofficially colonizing tons of countries with people, funding, resource exploitation, etc. Why spend tons of money/resources on something that could/would fail, when your enemy is paying you to advance your own technology and people?
Waiting ten, twenty years and doing nothing different in the current scenario would have the same economic equivalent of landing several divisions while blowing up parts of our infrastructure with clandestine forces. But instead of spending money, we're shoveling it at them as fast as possible.