1) Is the US trying to encircle China militarily ?

Partly not fully because China has more than 1,3 billion people, military spending has been increasing a lot in the last 17 years and China's intentions of what it'll exactly do with such a huge army isn't clear.

2) Does the USA see China as a real threat, or is it just being careful ?

A possible threat to the balance and stability of the region and the world.

3) Would the PRC ever invade Taiwan, eventhough it may lead to a war with the US, and possibly also Japan ?

I'm afraid yes. I hope all the people in Taiwan can decide their future eventually on their own.

4) Is it a good thing for the US to manufacture its own products in China ? It certainly helps corporations make bigger profits, but also creates unemployment in the US.

There should be a balance between what is produced in other countries and the unemployment that's therefore being created.