Getting taught a Texas sized lesson tends to force you to reconsider angering your northern neighbour. Furthermore, the US has allowed the drug trade to flourish which has destabilized a large part of its southern neighbours, forcing them to be reliant on the US for economy and security.
The Chinese could emulate their tactics here and forment dissent between ethnic/cultural lines in SEA, which is already a bit of a powder keg, this would leave them too distracted to have a united front against China. This would be a realpolitic solution but most likely would lead to harm towards the Chinese dispora and is against long term Chinese economic goals.
By now it is clear that showdown against US expansion is needed, only the question is where.
The most obvious and bombastic choice would be to draw US into invading Taiwan, crush their invasion forces and create an opening that lets the PLA remove vast swathes of Asia from America control.
But more conservative choices would point towards Iran, Ukraine or even Israel or the Baltics. Then, China would attempt to create an another Afghanistan situation for America using other states as proxies, draining them to the point of collapse. That would not ensure a smooth "handover" of US Asian colonies to China, but it also risks much much less lives.
To advance these goals, China's focus should be on Vietnam, Myanmar and Cambodia. They're the salvageable parts of ASEAN, and as long as China has its infiltration inside ASEAN, the organization will be unable to actually go against China due to deadlock.
Wooing countries that are deeply entrenched with fascism, such as Singapore, Indonesia and Philippines (in particular the first 2) will not work unless China devotes very heavy effort on them, but given the global situation, the effort is better spent ensuring that neutrals stay on China's side as well as building up new directions such as Russia or Iran.