The decisions of the PRC in the Fourth Taiwan Crisis suggest to me that, in the event of its red line of formal independence being crossed, there is a reasonable possibility China will not actually carry out an immediate military assault on Taiwan. China's reaction will depend critically on the willingness of third-party actors to go to war with China over Taiwan, and it may choose to wait further still. I used to believe China will definitely launch an assault in this scenario, but now I am not so certain.
Hindsight is 20/20, but still hindsight tells us that China had to issue an explicit threat to Pelosi and the Taiwanese government no matter what happened, even if Beijing does not intend to use lethal force. This is China's way of communicating to a trespasser that its core interests are being harmed, regardless of what it decides to do about it immediately. Not issuing these threats would be tantamount to an acquiescence of the trespassing, and this would make Beijing appear weak both internally and externally, which would of course invite domestic unrest and further trespasses. If Beijing's threat successfully deters a would-be violation, then great. If not, it is not exactly a worse outcome than if Beijing said nothing. Of course, repeated reliance on this strategy with repeatedly foiled bluff will lead to a loss of Chinese credibility.
China has shown consistently that it is a pragmatic and calculated actor, whose decisions are firmly rooted in realpolitiks. Add to this the very real Chinese belief that time is on its side, you end up with a picture of a very cautious, risk averse actor. This is where I will make a leap of logic: it does not make sense for a risk averse actor, whose strength is growing relative to its adversaries, to gamble on immediate military action. China's red line on Taiwan could just be a way to signal its resentment to a formal declaration of Taiwanese independence, and the threat component of it may not necessarily be carried out, at least immediately. How China will respond depends on the risk involved. If there are no external support forthcoming for Taiwan, China will almost certainty not hesitate to use force. However, if the US signals convincingly that it will fight a long drawn-out war with the PRC, or signal through the act of joining the fight, China may very well back down to a ceasefire.
You might think what I'm saying is crazy, but stop and consider the actual impact of a formal declaration of independence. Does it actually change the facts on the ground? Does it preclude the possibility of military assault in the future? Well, of course not. Borders and nations are man-made, and as such they can be man-broken. If Taiwan declares independence at a suboptimal timing for China, and with US support, China can conceivably still not do anything just to buy more time, providing it perceives that its comprehensive national strength will continue to increase in relative terms. Once China has a sufficient preponderance of force to reduce the military risk to an acceptable level, it can still launch an armed reunification while deterring or defeating a US-led intervention. There are no laws of physics preventing the PLA from crossing formal national borders. Russia recognised Ukraine's independence, but there's a reasonable chance that in time Russia will annex any part of Ukraine it wants to annex.
Taiwanese independence forces may well be emboldened by the events of this crisis, but this is not to say that they will certainly go ahead and cross the red line. There is still a big risk that China will deviate from its usual risk aversion and simply react with lethal force, particularly given the domestic cost of inaction for Beijing. So formal independence will be deterred for the time being. However, the risk I see is that Taiwanese independence forces will continue to salami slice right up to the red line, to test Beijing's resolve. They may undertake further provocations, e.g. inviting more foreign leaders to Taiwan, changing the RoC flag, changing the anthem, disavowing Sun Yatsen, disbanding/renaming the KMT, further desinicisation policies, stationing sizable foreign troops, or making military agreements. The lack of a strong reaction by Beijing to any of these moves, particularly the lack of lethal response, could very well convince the independence forces that Beijing's red line is just a bluff. They would then cross it and declare independence if they have reliable confirmation of US military support. This is where I see the danger to both sides of the Taiwan Strait, and especially more so for Taiwan, in the medium term.
