China's English speaking non-public funded media is bad, but it shouldn't be conflated with the foreign ministry and ministry of defense who can run circles around their western counterparts.The more I think about it the more this seems to me like a Sun Tzu "appear weak when you are strong" moment. Normalizing exercises in Taiwan claimed territory is a pretty big win, especially if uncontested. Because you can then salami slice from a much higher starting line. Now instead of "will they go into the ADIZ" it is "how long is this no fly thing". Especially if this is sustained yet sporadic, it keeps them on their toes.
Basically imposing a soft blockade on Taiwan would have been seen as ridiculously escalatory, but now is seen as weak. Wow. The Overton window didn't just move, they did a remodel.
Once Pelosi raised this issue, China went on to bring the issue into public light as much as possible, to embarrass Biden. Biden was given the choice of proceeding and overextend for minimal gains, or canceling and evoking massive loss of face.
Now, as the western press in increasingly panicking as they start understanding, they've buried in hours, decades of Taiwan independence gains like the median line or China agreeing not to overly or moderate shipments/flights to the Island. They thought they were "calling China's bluff" but in reality they accepted a horrible trade deal.
The final cherry on top now is if someone now leaks some documents regarding insider trading, Pelosi and this event. Then, Biden's authority and Pelosi's professionalism will come under severe question, it might go as far as to destroy the whole Biden regime's stability if proof can be obtained that Pelosi risked war and used US foreign ministry, military and Tsai authority's hospitality in order to profit as a private citizen.
Of course, maybe Pelosi is so incorruptible that there really is no such dealings at all. How much do people wanna bet on that?