They are doing stuff, but it is very slow (especially compared to what the good old USSR did back in the 1950's and 1960's.... and don't even get me started with a comparison to NASA in the 1950's and 1960's) and their operational tempo is absolutely pathetic.
Sorry to burst the bubble, but it took Americans a couple of decades before they mastered fully automated docking. The Chinese accomplished this on their very first attempt.
Their progress seems to go very slow, but underneath it is an admirable long term plan (5 years plans that fit into ten year plans, that fit themselves into longer term plans!). I guess that's the advantage of having a dictatorship. They are not that far behind on what they announced back in 1999 (manned flight in 2002 (done in 2003), moon probe in 2007 (done in 2007), space station and docking around 2010 (done in 2011)...).
This summer they will man their first space station, twice. Next year Tiangong 2 will go up, by 2015 they will have 20 ton modules (tiangong 3) and improved launch power (CZ5).
Next year also the Chinese will land a rover on the Moon: first rover on the Moon since the Soviets in 1976, but more importantly it will be the only rover on the Moon.
Their Shenzhou spacecraft program might resemble the American Mercury or Gemini, but it includes all Apollo features as well. By 2020 they will have landed on the Moon, to stay a bit longer than a couple of days!