In this regard, China, as one of the great powers, needs to have an armed forces that are expeditionary in nature, that is small, well trained, and highly mobile.
Very true. Expeditionary forces are suitable for all Chinese potential needs. These would include conflicts with neighbouring countries (Taiwan included) and force projection further afield. And of course there's the most important mission. Small forces can be well paid and kept loyal to the government.
a.) To defend against air attack, you need to disperse your forces. However you are vulnerable to beig destroyed piecemeal by enemy ground forces.
b.) To defend against ground attack, you need to concentrate your forces. However you are vulnerable to air attack.
I'm not completely sure this is such a factor anymore. True, massing of forces does make their detection easier. On the other hand, mass of forces constitute a single mass which can be covered better by ground based defences. Besides, forces which are joining up to become a concentration would be very vulnerable.
2.) The best defence against air attack is an air superiority fighter. SAM systems are useful compliments but are a poor substitute. The reason is that they always start their engagement at 0 elevation and 0 airspeed. Especially true against modern anti-sam tactics and technology employed against it. In this regard, the PLAAF needs a modern airforce, not just in terms of air superiority fighters, but also force multipliers. It needs to stop relying on ground controllers, developed tactics in concert with an AWACS, etc.
I would argue against this notion somewhat and say that in defense SAM's are becoming better option than air superiority fighters. This is due to two reasons; smart weapons and network-centric warfare. Nowadays the reason for fighter to exist in air defence is to act as a sensor platform and launch platform for radar-guided missiles. It is unlikely that short-range IR missiles will be used anymore. Cannon is useful only for firing warning shots. Nowadays targeting information in addition to location information can be provided by other platform than the fighter itself. For long time the basic idea for using fighter radar itself has been to confirm information available via radar network / AWACS.
That really leaves the launch platform duty for the fighter aircraft itself. But is a fighter cost-effective launch platform in the future? SAM's don't come for free but fighters are prohibitiously expensive nowadays. To give 24h/7d cover one needs a lot of them. Fighters are more flexible in sense it is easier to concentrate them. On the other hand the advent of cruise missiles and other standoff weapons makes it easier than ever to make a mass assault which can easily overwhelm a few patrolling fighters available. Yes, fighters can be employed against carriers of standoff weapons but farther away one employs a CAP more resources one needs to sustain them.
Ultimately it becomes a budgetary exercise to judge whether it is cheaper to provide hideously expensive air superiority fighters and supporting resources to provide long range CAP, or to purchase a mass of SAM's to defend against massed assault of standoff weapons.
Fighters (whether manned or unmanned) will be needed for offensive air superiority and escort duties in the future, too. The middle ground for air defence might be a "missile barge", a cheap UCAV with long endurance and radar-guided missiles but relying on targeting provided by the air defence network.
Due to network-centric warfare I don't think the physical location of controller is important anymore. With modern communications the exactly same information can be transferred to any meaningful distance. The main reason AWACS needs to be a large aircraft is that the radar equipment is fairly large and large aircraft provides more endurance.
Yes, same arguments have been used in UK 1957 White Paper for example. But the difference is that now it is year 2007 not 1957. Communications and missile tech has made enormous advances.