At the end, there is always the military option to annex Taiwan. But that entails serious risks because it wouldn't be a cakewalk. Any invasion of Taiwan would require assembling a huge military machine involving all elements of China's armed forces, not only to invade but to successfully occupy a largely hostile country. And that is easier said than done, particularly when factoring in US military involvement.
But the specter of Chinese invasion not only keeps the Taiwanese on edge, but also puts more pressure on Taipei internationally -- including from the US -- to avoid provoking Beijing. (Who is provoking who is another matter.) And that serves China's immediate interests -- to maintain the fiction that Taiwan is not an international entity.
Sushil Seth is a freelance writer based in Sydney.