The trend of power balance between China and Japan has worked in China's favor in recent years, but Japan still has the edge:
With the world's biggest military, China far outnumbers rival Japan in manpower, ships, aircraft and defence spending, but analysts say underlying weaknesses leave it still wary of a fight. ...
China's military "remains qualitatively inferior, in some respects, to more technologically advanced armed forces in the region -- such as South Korea and Japan -- and it lags far behind the US", [the IISS Military Balance 2014] said.
If it came to a fight over the Senkakus, I think Japan has the edge and we could avoid direct combat with China while supporting Japan's campaign--which would actually be vital for Japan to fight.
And Japan has decided to refocus their military to the south and come to the conclusion that they must spend more to affect that trend to keep China's advantage from growing too great.
Really, if China wants a war to signal their arrival as a great power, they'd do better to emulate Japan more than a century ago and target Russia rather than tangle with Japan and risk war with America, too.
