You've lost jets.Since we have no offensive air force, if we start losing the air war against the US and US troops start landing in China, we've already lost, so might as well nuke them and take them down with us.
You haven't lost land or territories. So the war is still on.
To the PLA, the PLAAF is nothing more than a child that hasn't matured.
The PLA takes into consideration that the PLAAF, and PLAN are not capable of protecting China, yet.
China's nuclear policy is no first use.
If they intended on first use, they wouldn't make their ICBM's mobile.
They would have made silos instead.