I don't know where you have read latest analysis from, but Chinese's decision to delay their action against Taiwan has nothing to do with their lack of military capability, but rather political. There are reports that massive monetary injection into China interior from Taiwan, from all the Old Guards who wants to return their family back into China, as their condition improves with part free enterprise being allowed.
Chinese army may not be impressive, but they have nukes and all the neccessary number of weapons, though outdated. If you are engaed in conventional warfare, what area you may lack, you make up in other places, don't you? And I don't think ability to raise million soldiers at a moment's notice isn't something to take lightly. But that's just my personal take.