China spending less than 2% of GDP on military and no-first-use nuclear policy with minimum nuclear warheads are major errors. Economic linkages alone won’t stop war as seen with EU-Russia.
If the US and it’s vassals think they can get away with intervening in the Taiwan war without getting nuked, they will intervene.
This is why the no-first-use policy is stupid. NATO is not getting into a direct war with Russia because of the large size of Russia’s nuclear arsenal, advanced delivery capabilities and first-use nuclear policy.
China need to remove these self-imposed shackles.
I agree with military spending increase, but switching to a first-use nuclear policy must be done at a opportune time. US would use the announcement of the switch as an opportunity to exaggerate the China threat.
The best time to do the switch would be hours before the unification war over Taiwan, couple it with the announcement that nuclear forces are on alert. This would achieve the goal of deterrence while not sacrificing the veneer of pacifism before the war.
While the economic linkage won't prevent war, it will ensure their economy takes a massive shock and damage when they try to sanction or decouple too quickly, It could also make them think twice about getting into conflict and instead to stay neutral or become uncooperative with the US.
Edit: Currently under peacetime, Economic linkage is still useful in trying to pry them off US influence, and diplomacy to obtain partnership and cooperation on international matters.