My take on it has always been that China canít win as long as the United States would oppose an invasion, and itís going to be a long time (if ever) before China could hope to match the US forces that could be surged to the area in the event of a shooting war.
Something very interesting was mentioned by the readers in the comments. Since economic ties with both Taiwan and the United States are very strong and are growing every day, any invasion would mean devastation to the Chinese economy. Itís doubtful that the Communist government could survive such a disruption.
Iím mentioning this because Strategypage.com has a post that essentially says the same thing. (Post from April 11, 2005)
Most Chinese also realize that war with Taiwan would mean war with the United States. This would mean an interruption of trade with the U.S., and massive unemployment in China. Chinese are more concerned with economic matters, than whether or not Taiwan is ruled by China. Millions of Chinese work for Taiwanese owned companies, and they are not keen on losing their jobs because the government wants to attack Taiwan.
I think that the guys at SP need to cough up some royalties. One of those little packets of peanuts they pass out on commercial flights would probably do it. Then I could mail off an individual peanut to every reader who mentioned Chinaís growing financial dependence on the US.