Is it cowardice or the leadership is just not interested in flexing it's muscle on an issue that doesn't touch it's core principle eg. TAIWAN. But as I have commented on this thread that if the Chinese leader has the same tendencies of say Putin, this situation in the Solomon Islands would be a replay of the Crimea situation where the PM of Solomon Islands publicly call for China's military help and that's when the PLA is then tasked to spring into action in an overwhelming fashion to the point that Australia would have no choice legally and based on preponderance of force vs China it would have to vacate or get vanquished. The episode would be then become a new chapter in the power and strength of China and in my opinion would send a strong signal anywhere else in the world where there's a strong Chinese investment and population that China will come to your assistance if ask and requested by the legally voted, selected leader of any country.
But that scenario will unlikely happen due to the existing inertia and various political considerations that China has to consider. The government follows a strict formula and guidelines it's not willing to bend unless it's survival is at stake. Perhaps down the road, when enough Chinese people are getting butchered and businesses set ablaze the Chinese leadership can be forced and must be forced to take some modicum of action otherwise it'll be an area of weakness other countries will seek to poke time and time again.
