In addition to lower personnel costs, their manufacturing industry is generally more efficient. The result is they get a lot more "bang for their buck" and you can't compare military spending just by looking at capital expenditure and currency conversion rates.

They also have different goals. America spends to maintain global hegemony, which means a huge fleet of aircraft carriers meant to operate around the world. China isn't (yet) spending in that way, they're a lot more focused on regional objectives.