Speaking of "knowing where the nukes are"
China has 10, count 'em, 10 nuclear subs. The rest are deisel/electric.
http://www.globalsecurity.org/milita...china/navy.htm
That makes the task of tracking them VERY easy.

Not really hard to pick up, even if they slip through.
http://www.fas.org/blog/ssp/2009/11/subnoise.php
There is also the small matter of the fact that China's Navy has deployed outside of its territorial waters exactly ONCE in 400 years. (thank Somali pirates for that)
(edit)
The more one reads about Chinese submarine capability, the less and less likely it seems that the Chinese are responsible. The Chinese Navy just doesn't have the general capability to operate a sub that far from its home bases. They generally only get two patrol cruises per year, TOPS, among other things.