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Originally Posted by Oberon
China will not start anything over Taiwan, not yet anyway and probably not until about 2015-2018, they've still got a way to go on their anti-carrier abilities. I think what Beijings ultimate goal is, is to discourage the idea of American intervention before any war has even begun. It can do this by increasing the capability of its economy and its military, until the US can no longer afford to compete. At that point it then makes a thinly veiled threat at Taipei which is something along the lines of "if you do not join us as a Special Administration Region then we're going to blockade you until you run out of money and starve" and Taipei will realise that their position without US aid is untenable and fold.
The last thing China wants to do is go to war with America or initiate a costly military attack on Taiwan. Beijing wants Taiwan intact, it need Taiwan intact. Most of Chinas trade is with Taiwan and surrounding nations, and if it launches a war there it will completely screw over its economy and that is about the only thing keeping China afloat at the moment and preventing massive internal social unrest (although if the gap between the poor interior and rich exterior continues to grow then unrest could be seen anyway). Therefore China will exert as much pressure as it can on its neighbours without actually warring on them, after all, as Sun Tzu said "True excellence comes from achieving victory without fighting."
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China's economy is already starting to falter. Their factories are starting to close because manufacturers are finding it cheaper to move to places like Vietnam. China's top trading partners are the US, Japan, and Europe. It doesn't need Vietnam, Korea, or the Phillipines, which are many of the places it's currently bullying.
One also needs to take into account China's history. In ancient times, China was the world super power, and they expected everyone to pay homage to the emperor, even if it was only lip service. When you look at China's foreign policy today, it seems they're following this same trend in expecting Western powers to pay homage to China, even if they don't really mean it. This leaves them confused and bewildered when the West basically says "LoL?" Add to this a sensitivity brought on by China's recent history of being occupied by world powers, and you have a nation that cannot and will not accept being told "no" as they see it as a throwback to China being under the oppression of other powers, hence China's warnings to stay away from "internal affairs" and "core Chinese interests" whenever and wherever it can get away with it.
China has shown several times that is is capable of acting irrationally over Taiwan, and the Chinese government is whipping up patriotic sentiment at home to take pressure off of social issues. This is starting to backfire as the public is becoming more zealous and pushing the Chinese government to be more aggressive on the world stage than it is currently prepared for. Thanks to its bullying efforts in the South China Sea, China's neighbors are running, not walking to America looking for help. Many in the public in both Vietnam and the Phillipines have been openly calling for war with China. China can't help but feel more isolated by this trend.