China should consider responding effectively and diligently, not just merely reacting.
The US is constantly daring China to fall into the same trap as Russia did, looking at how Russia is struggling to get out of it right now. China must hold firm and steady, and try not to fall for the same trap as Russia did on Ukraine for as long as possible.
To start small, China could consider enacting sanctions against those (and maybe their immediate family members) in the Senate Foreign Relations Committee who voted "Aye" for the bill, and seize their investments, properties and holdings in China, if found. Since China can and has done the same for Pelosi and her immediate family, these people would be considered small fry.
Furthermore, unlike Russia, China is the 2nd largest economy in the world by Nominal measure and largest economy in the world by PPP measure.
I do believe China can use that advantage as a leverage and tool and inflict serious hurt to them in response.
What trap? It is America who got trapped and had their EU's economy wrecked at essentially less than 0 cost for China.
In practice, the war for Taiwan has already been started, China should in fact not sanction US officials because such sanctions are useless if they only target officials. Officials are replaceable and it will not meaningfully prevent US invasion.
The first step to solving a crisis is ascertaining its true nature, mock outrage, moral arguments and so on are useless. Fortifying and building the military is the answer, by making China too difficult of a target, direct US attack will be deterred.
1. Enlargen the PLA, increase the amount of warships and air force. Set a legal target demanding the air force to deploy as many operational stealth fighters as the US military by 2030. Make sure the rocket force stays topped up on its most advanced missiles. Expand production capacity for most platforms.
2. Pursue collective defense. Ensure using economical/dual use and military deliveries that the current European front ends with at the very least a landlocked Ukraine.
3. Draw on civilian/volunteer efforts. Set up large volunteer funds for public companies and private individuals alike, allowing them to support the military buildup. Such a move might seem foolish because China already has enough money, but it is less about money and more about making civilians feel like they're participating in the struggle and to spread awareness of the national safety question.
4. Economic warfare should not be aimed at humiliating US officials, who have no shame anyways, but at strangling the US economy and depriving goods from them. Sanctions should ideally be saved for a late stage of the conflict, because they will eventually adjust and cope with shortages. Likewise, to increase preparation level around Taiwan province, it might be wise to order all shipping to be rerouted to Fujian province for security reasons first.
If you can build a state of art hospital in 7 days, you can build a DF-17 park in less than 70 days. China just needs to commit the same vigor towards combating US threat.
