Man I absolutely LOVE that book. And the "prequel" the Zombie survival guide. FYI there's a movie coming out in 2012 or something, featuring brad pitt, according to max brooks himself.
As to the treatment of China, it was kinda stereotypical, but frankly max didn't speak very well of the west either. In his scenario, public lack of trust in the American government severly hinders the government's attempt to contain the plague early on, in the book said to be because the government had fooled the public so many times (clearly a hint towards Iraq and the war on terror). American corporations unscrupulously use the fear to make huge amounts of money for themselves while making the situation much worse.
China changing government in western books is sometimes anti-China drivel, but in this book, so many countries completely change their nature and government, that i can be forgiven. As you mention yourself. I think China actually got a fair treatment. In the book China is the largest and most dynamic economy in the world. Even that is a concession for many western writers.
As to the PLA, I think that it would be one of the armies most suited to dealing with the zombie plague as presented in the book, if they knew what they were up against and had proper strategies for dealing with them. Max highlights how the super-technological armies of the west are completely ineffective against the zombies, and in the end has to opt for a pure infantry army armed with carbines.
PS: I didn't bother hiding any information. If you want to discuss the book, you have to mention stuff