It's not their numbers, but their pace of modernization. They're building new ships at twice the rate as USN, and these new ships are on par with current US and European equivalents. In 2019, they launched more ships than the navies of France and Spain put together.
https://www.reuters.com/investigates/special-report/china-army-navy/
Thanks to their strong industrial sector and economy of scale, they can produce similar ships at fraction of the cost. That means their budget, although smaller, have a lot more buying power. While USN is still the superior force in the open seas, China has the advantage inside the first island chain. If given another decade, even second island chain would become shaky.
Importing food, energy and rare earth is not necessarily indicative of particular weakness. US has been importing the same things for decades.