They have been very quiet. Of course they are a traditional ally of Pakistan and enemy of India. But they have been somewhat shoved aside in Pakistan by its post 9-11 shift to a pro-US line. They certainly have not pledged to aid Pakistan to protect it from India.
China probably likes the fact that the US is worrying about Islam, not Taiwan or Korea. The basic story seems to be they stir up trouble for us at long distance and stay out of the resulting fracas. They have supported Sudan, Pakistan, and Syria in particular for those sorts of reasons. But they have avoided any direct "crossing" of the US over such things, reserving that for Taiwan.
I doubt they relish the prospect of India defeating Pakistan in a conventional conflict, or the prospect of a nuclear exchange. But they probably don't mind us being worried and busy over it, and divided between Pakistan and India. The whole thing undoubtedly helps them sell missles. But the bottom line is they don't want India to just win outright, but don't appear ready to jump in to help Pakistan and prevent that - so I doubt they want an actual shooting war.
If you honestly believe that the PRC have been moved aside, then why do they continue to ship arms to Pakistan, and why does the joint development of a Pakistani Navy / PLAN port at the entrance to the Strait of Hormuz continue, well after the reputed "alliance" of Pakistan with the War on Terror? I could equally argue that the feigned "alliance" with the US by Musharraf is nothing more than a Machiavellian move to dupe the US into believing that we are creating a rift between Islamabad and Beijing. Of course, naturally, any such move would likely be followed up by a nasty "surprise" (at least it would come as a surprise to the current main stream of diplomatic thinking, esconced as it is in the "post historical" pseudo-logic typical of the writings of Francis Fukuyama and Thomas L. Friedman.)