As Trump traipses off the China proclaiming that Xi is his bestest friend so he'll do whatever he wants him to do (where have we heard that before?) this piece in the Atlantic (gift link) should clear up what's really going on:

Beijing has avoided capitalizing on these conflicts with a strong public position. Instead of confronting the United States by defending Iran, a longtime strategic partner in the region, China has provided only indirect support and has largely stayed on the sidelines.

China's restraint should not be seen as a sign of weakness. Instead, the country is biding its time, positioning itself as the ready choice to fill a leadership vacuum when the United States flames out. China's leaders are working to shape a world in which their dominance emerges not as a climactic victory over Western interests but as a fact on the ground.

In private conversations and public writings, China's leaders and their advisers often describe America as "declining but dangerous"--a late-stage power prone to bursts of aggression in the hopes of arresting its slide. As early as the 1990s, the height of the United States' unipolar power, Chinese thinkers were already theorizing about America's decline. Wang Huning, then a little-known academic, was moved by his travels through the U.S. to write the book America Against America, in which he described a nation beset by social fragmentation, inequality, and political dysfunction. Shocked by the country's problems of homelessness, drug addiction, racial violence, social divisions, and low education standards, Wang concluded that America contained the seeds of its own destruction.

He is right. Read the whole thing. It's sobering but true.