I am not a fan of China at all and share some feelings of those who wrote they felt uncomfortable while staying in that country. I was very interested to travel there to see various "wonders of the world", but would not like to live in the world where they dominate.
However, sad irony is that it were the US (and the EU to a certain extent, too) who were "feeding the monster" for decades letting it grow on steroids by placing their manufacturing in that part of the planet.
Speaking about "punishment" (for whatever reason), it is too late now, IMHO.
Military wise, even with conventional weaps the US have no chances because the Chinese would operate from the land. And its Navy is now quite comparable with what US can deploy there.
On the economic side, if Uncle Sam decides to overpress with sanctions, the Chinese may claim back trillions of bucks that the (US) government owes them, and it will destroy most of the international trade based on dollar. And if this debt is unilaterally nullified, the Chinese might start confiscating industries that belong to the US on their territory and this may really lead to military confrontation.
With all that said it looks like all sides should calm down and avoid too aggressive actions. The West is not able to put China on the knees, but can stop feeding it further on. China will likely accelerate efforts to take third-world markets (Asia, Africa, Latin America) but would it help them get the same level of profit is a question.