Hypothetically, if China did seize that small island, what exactly could the US do about it? Sanctions aren't an option. Military isn't an option. I don't know that the US has a foreign policy to address such an action and given China's ownership of so much of the US debt isn't America the eunuch in the room on this issue?
“I think if Thomas Jefferson were looking down, the author of the Bill of Rights, on what’s being proposed here, he’d agree with it. He would agree that the First Amendment cannot be absolute.” - Chuck Schumer (D). Yet, Madison and Mason wrote the Bill of Rights, according to Sheila Jackson Lee, 400 years ago. Yup, it's a fact.
Since obama became pres the world has spun out of control and I expect China will make this move while obama is pres if that is a move they want to make in this world wide chess game.
What if it wasn't a small island, but North Korea that China suddenly decided to invade and liberate from it's oppressive gov't?? While we all can recognize that China does have a very oppressive gov't, they are vastly better than NK and a Chinese take-over of NK would definitely make things better for the people of NK and bring a large measure of stability to that region.
Our nation has not always lived up to its ideals, yet those ideals have never ceased to guide us. They expose our flaws, and lead us to mend them. We are the beneficiaries of the work of the generations before us and it is each generation's responsibility to continue that work. - Laura Bush
However, if China felt threatened, it could start to focus more on increasing it's capabilities. If they were to work more closely with Russia in that regard, the two of them together could become quite formidable.
While I agree China and Russia are both dangerous, let us not forget that their economies are both rather feeble behind the curtain. If all else failed, denying Russia the ability to sell its oil and gas would strangle it. China is not really interested in global domination, it is concerned more about shoring up it's surroundings to insulate itself from outsiders.
Globalization has brought with it cheap goods and economic interdependence and these things make us all vulnerable. It has proven to be the achilles heel of the US in foreign policy. US companies sought to maximize profits through cheap labor and production costs by going to China, and in the end succeeded in making the US economy weak enough that we now cannot effectively act as the world's lone superpower.