Actually, they did have knowledge of them and called them "Seres" or (people of the) silkworms. It wasn't meant as an offense, and I don't think it was ever received as such. To be fair, there wasn't china back then, and Qin was just starting the drive to unite it. This is 272, not 221 when it finally united it.
As for how Greeks would describe Chinese? Who knows.
Perhaps like: "Short people with weird characteristics, strange clothing and great great NUMBERS."
No offense to any Chinese here.
It has been suggested that the Baktrians had some influence in the chinese especially on the creation on the "terracota army" whose realism hadn't been seen before that time. That is uncertain. What isn't uncertain is the introduction by the IndoGreeks of the coppernickel standard which was first used in China before that. CopperNickel coins is what most people use in coinnage to this day. This suggests at least knowledge of one another.
Greeks were illustrious sea travellers as well. Reaching as far as present day Vietnam. Ptolemy, the Roman geographer of 2nd cent. CE mentions that. Archaeological evidence there confirms that there were greek trades there.
http://en.wikipedia.org/wiki/Oc_Eo
At the time of Ptolemy about 400 ships would make the voyage from Egypt to India and further on. Their crews and captains, were at the overwhelming majority greek even when living under the Romani. Using as a base the greek quarter (emporion or trade post) of
http://en.wikipedia.org/wiki/Anuradhapura
Unfortunately there is no evidene that shows that they reached mainland china by sea, even if a Chinese sea traveller speaks of people who resemble mediterranean born travellers when he reached present day Sri Lanka.
-edited for a clarification-
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