This may shed more light on the hysterical headline on Drudge, etc. Basically this is two fold in my opinion. The primary motivator is that China is feeling 'boxed in' and 'surrounded', then there's those islands which have to be mediated at the U.N. or by diplomatic means. The generals were just posturing and showing a willingness to fight in my opinion.
China wary of U.S. military moves in Asia-Pacific
"WASHINGTON -- When a senior U.S. general met in Beijing recently with Lt. Gen. Cai Yingting, the deputy chief of China's armed forces, Cai forcefully objected to America's expanding military presence in Asia and the Pacific, describing it as an effort to encircle his country.
"Why are you containing us?" Cai demanded, according to a U.S. official who was present and described the incident in return for anonymity.
The U.S. general denied seeking to contain China, but it's easy to see why officials in Beijing might get that impression.
The Obama administration is forging closer defense ties to countries near China, including India, Vietnam, the Philippines, Indonesia and Singapore; repositioning troops, planes and ships; and stepping up aid in the South Pacific to offset attention from Beijing."
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China wary of U.S. military moves in Asia-Pacific - NY Daily News
Generals discuss China's defense against Japan
"Several Chinese military generals have voiced out against JapanÂ’s infringement on China's sovereignty of the Diaoyu Islands.
Despite their different tactics in the search for an appropriate solution, the generals- including Luo Yuan, the major general and executive deputy director of the China Strategic Culture Association, Peng Guanqian, major general and deputy secretary general of the Council for National Security Policy Studies and Zhang Shaozhong, major general and professor at the PeopleÂ’s Liberation Army National Defense University - have unanimously expressed the willingness to nip JapanÂ’s attempts at violating ChinaÂ’s maritime territory in the bud.
All generals agreed that the Yoshihiko Noda cabinetÂ’s current move to nationalize the Diaoyu Islands, poses a great threat to the international order that has been established since the end of World War II (WWII)."