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"The military will act urgently to sustain and strengthen deterrence, with the PRC as its pacing challenge. We will make disciplined choices regarding our national defense and focus our attention on the military’s primary responsibilities: to defend the homeland, and deter attacks and aggression against the United States, our allies and partners, while being prepared to FIGHT AND WIN the Nation’s wars should diplomacy and deterrence fail." (emphasis mine)
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No one in the Biden administration is in any way naive about how wars should be conducted when diplomacy and deterrence fail...witness the effectiveness our our weapons technology in Ukraine vs. Russia's...oh, and wrt to your concern about China not being mentioned...the strategy can't be any clearer when it states..."with the PRC as its pacing challenge."

btw, since that Strategy Paper is a publication that can be read all over the world, it is also a form of "messaging" to the PRC and Russia...i.e. while we would naturally prefer to compete economically, without violence..."We know what you're up to...and we will be ready" (my interpretation).