I think you greatly underestimates what Taiwan means to China. People in the west are quick to dismiss any claims by China on Taiwan as having any legitimacy, viewing it purely as expansionism. But regardless of whether the western view of that is right (or ought to be right), the Chinese don't view it that way: they view it as a sovereignty issue, as an unfinished part of the Chinese civil war, and as part of the US' efforts to militarily contain China. Taiwan is a strategic location on which the US's "first island chain" depends — China's entire life depends on it.

As such, China would rather fight the entire western world than to let Taiwan go. They would rather destroy all their relationships with the west than to let Taiwan go. It doesn't matter whether they will actually win or not — they are prepared to, and that's what we don't understand (or for some people: don't want to understand).