I think China would just sit back and let the US destory itself to the maximum extent possible. I can see them arming and internationally propagandising for whichever side was losing at that moment to make the fire burn as long and hot as possible.

China does not overtly act since it's not their style. But they already have a lot of influence in California and Hawaii. I could see them propping up a communist puppet state however. You'd have a clown like Ted Lieu as the new chairman of the California communist party and doing Xi's bidding.