If they lost, the Chinese government would be overthrown, just like the Argentine junta after the Falklands War. It would also add to the list of Chinese humiliations at the hands of their island cousins.
I'm sure the Chinese remember their humiliating loss to Japan in the 1894 war. They thought they were superior to the Japanese, but Japan quickly overran their defenses and humiliated them. If not for the intervention of western powers, Japan would own a large chunk of China. The humiliation the Chinese leaders faced after defeats in 1894-1895 led to rebellions against the Chinese leaders. China is itching for payback after that and WWII, but may get trounced a third time in recent history.