I disagree with you on only one thing: that the Chinese would *let* us fight a war in Korea. The odds are better that the Chinese would declare a “Jiabao Doctrine,” claiming that any attempts by foreign powers to “interfere” in Asian affairs would be treated as aggression against China.
Personally, I do not think that the Chinese wish to subdue America by military force. They can do it by owning us.Their contempt for our self-indulgent behaviors leads them to believe that there is no way that the US will not eventually collapse under its own sloth and greed for consumer goods.
I agree with you and think a scenario like the one you describe is probably the most likely scenario. I don’t think China is looking for war with the US right now, but I don’t think that they will just let the full might of the US military waltz into their sphere of influence. Any attempt to exert US influence militarily in the region could result in vigorous opposition from the Chinese by economic, diplomatic, and possibly even military means. I think China knows that the US cannot keep up its spending (and therefore its influence)in the region forever, and therefore the Chinese probably prefer to fight the US by waiting us out. The US will destroy itself without any help from the Chinese if it keeps on its present course.