They're actually testing global resolve and influence. How does the world respond? How does the US respond etc.
They're making a huge mistake antagonizing Japan. Already their leaders have become "hawkish". You could start to see the "rising sun" flag be out more and more in citizens hands.
Japan devotes very little of it's GDP to military. Were they to kick it up to NATO recommended levels or global power levels, you'd see them easily spend around $70-$100 billion plus a year.
Also, factor in Japan is the world's leading nuclear energy producer, theoretically, they have enough enriched uranium and technical knowhow to build 1000 nukes in a month if they wanted to, they won't though.
China is on a very dangerous path these days. See, people claim they are a superpower, but they are not even close. A superpower is the world's eminent military, political, economic and cultural power. China isn't any of these things.
Politically, their closest allies are North Korea, Pakistan, Iran and Sudan.
Militarily, they are large and modernizing, but they have just put their first aircraft carrier through sea trials. It's an old 1980's Soviet-vessel. It still has not achieved the ability to manufacture it's own jet engines and get's them from Russia. China also has zero forward operating bases.
Economically, they are rising, but only at the behest of the rest of the world. It's nice to thump chests and burn Toyota's, quite another to have Canon, Nikon, Sony, Panasonic, Toshiba, Sharp, NEC, Hitachi, Mitsubishi, Fujitsu, Honda, Nissan, Mazda and many more corporations pull out China and lay off it's workforce. China is still only an export/manufacture based economy, it's trying very hard to turn itself into an industrial and technology based economy, but it'll be tough. How much will global companies and firms invest in China if it goes to war with Japan?
Culturally, you'll see more people playing american football these days, tons of basketball in Shanghai, Beijing etc. They eat KFC, they drink Starbucks, they use iPhones/Android etc. They wear blue jeans, they want to wear Prada, drive BMW's etc. Like most other nations, they have adopted the American/Western way of life and culture. You'll see more and more english, more foreign stuff all the time etc.
I could write more, but I'll leave with stating, that China is antagonizing several neighbors. Japan, India, Philippines, Malaysia, Vietnam, Taiwan, Cambodia etc. Let's see what happens.