The real problem for Taiwan isn't even China. Taiwan is being threatened by dynamics from within.
First there is the tech war. Before 2018 there was a global supply chain of electronic components where Taiwan is a key player in it. Now electronic components are no longer a technical or economic issue but has become a strategic one. So both China and America are now rushing to set up their own electronic industries in direct competition with those of Taiwan's. At the end of 2022 Taiwan's exports saw its worst plunge since 2009. Going down by more than 20% pushing Taiwan's economy into negative growth in the last quarter of 2022 and 2023 may not be any better. Part of this is simply due to sluggish demand for electronics globally but part of it is also that America and especially China is buying less from them because of there own domestic production increases.
Secondly there is demographics. Taiwan's population is now shrinking by almost 1% per year. And the population is aging at a increasing pace.
Then there is the fact that the government has increase it's focus on the military and is now spending more on the armed forces and has in effect reintroduced conscription. This is taking away resources that otherwise could have supported the economy.
All of this portents poorly for Taiwan's future and no solution are forth coming at the moment.