It's also seeming quite topical these days. Note this recent article: http://uk.reuters.com/article/usPoliticsNews/idUKTRE54363X20090504?pageNumber=2&virtualBrandChannel=0
It's no surprise that China would gear their naval buildup towards countering our Navy. And Adm. Mullen seems to be doing his best to tamp down the hype in the article.
If Japan and Taiwan were not strong US allies then China might be expected to gear its (deliciously named) People's Liberation Army Navy to dealing with those two local and regional powers. But it's hard to imagine any scenario involving conflict with either that would not instantly involve the USN, so the PLAN is obligated to deal with the threat as matter of basic military prudence.
That said, I don't think a conflict is inevitable. In the short and medium term the main cause for concern would be some sudden flareup over Taiwan. This is always a possibility because of the political and emotional stakes involved, which can be volatile. On the other hand, time may very well solve this problem.
There is, however, a long-term threat caused by grand strategic factors. Simply stated, the USA is the Top Dog in the world power structure. China is a former Top Dog that believes it is long overdue to return to Top Dog stature and it has the booming economy to support that. It's busy building up some military capability to back that up, but military hardware is just a small part of China's ambitions as it improves domestic infrastructure, reforms domestic affairs and invests in science and technology. This is a multi-generational affair that will play out over the rest of the 21st Century. It may result in some major war or wars just as the rivalry between the British Empire and Germany did in the first half of the 2oth Century. Or it may be resolved relatively peacefully like the Cold War. Can't say yet.
There may be "interesting times"" ahead.
*Interesting in the sense implied by the Chinese curse "May you live in interesting times."