I think China is fully prepared to deal with the US/Japan military intervention in the war of Taiwan unification. They have been preparing all these years. Without going into the details, I think even the US knows that the chance that it can intervene successfully is slim now, unless it escalates to the thermal nuclear level, in which case we all know there will be no winner. The bottom line is that China's will is much, much stronger when it comes to Taiwan, simply because it's Chinese territory. And the capability is in place now too, and grows stronger by the day.
Taiwan once had good chance to negotiate some good terms. Mainland China was ready and willing to concede a lot if Taiwan came to the negotiating table. This was particularly true in the early to mid-90's when the relative power balance between the two was most favorable to Taiwan (Taiwan's GDP was 45% of mainland's at its peak around that time; last year it was 4%). That chance has slipped away.
China's official standing policy for Taiwan is still "One Country, Two Systems" which started in the early '80s. But it is increasingly viewed in China as out-of-date and out of sync with reality. The OCTW policy was initially created for Taiwan, but had been implemented in Hong Kong first. China made huge concessions for the smooth return of Hong Kong, because it had a much weaker hand then. The lessons learned from Hong Kong's returning and since suggest that the unification with Taiwan must be predominately on China's terms for the better future governance of Taiwan (and the logical conclusion would be that the unification process might not be all that peaceful after all, but might be better in the long term...). DPP's brainwashing on Taiwan's new generation in the last 25 years has also made peaceful unification increasingly hopeless. The late Singapore prime mister and Singapore's founding father, Mr Lee Kuan Yew, who had very good relationships with both Chinese and Taiwanese leaders, once commented that DPP was very irresponsible and even cruel to instill the idea and sense of Taiwan independence into Taiwan's younger generation, because they would have a very hard and painful time to adjust when it is reunified with mainland China. Clearly, Mr. Lee believes Taiwan will be reunified with China.
OK, all these may be too complex to talk about here. I don't know how familiar you and people here are with Taiwan and/or Hong Kong issues. One thing is clear, if people mostly follow western media coverage on Taiwan, you will get a very limited or even wrong picture. Here is a
on Taiwan, the author is an American living in Taiwan, who speaks Chinese and is staunchly anti-PRC/CCP. Even he feels something uneasy beyond the superficial western coverage of Taiwan.
As recently as a few years ago, I read an editorial in The Economist - I think it was around January 2017 issue, but am not too sure. It advised that China should leave Taiwan alone, and in exchange, China is allowed to have the right to reach nuclear parity with the US. Something like that. I was shocked. The Economist, as a premier western journal, clearly has no idea what Taiwan meant for China. The editorial was partly motivated by the feeling of increasingly powerful presence of China on the world stage and the palpable pressure of China's willingness to bring Taiwan to the fold. Yet it still talks about China so naively and condescendingly.
