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Notes -
https://manifold.markets/news/chinataiwan
More markets where people put their (play) money where their mouth is with regards to their predictions, and I encourage everyone with strong opinions to do the same.
Personally I think the only factor that really matters is the mind of Xi Jinping. China will not invade Taiwan without his approval, and they'd likely immediately invade if he decided he did want to. Any weighing of the costs and benefits for China only matter to the extent that Xi Jinping actually cares about China instead of just his own personal benefit.
I expect Xi has many sycophants around him telling him that China is increasingly ascendant and that the US is on a downward spiral and that the Taiwanese masses actually want to be unified under a glorious greater China. That's a standard situation for a great many dictators.
On the other hand, Xi probably isn't totally isolated from reality. There are some major issues even the biggest information bubble I doubt could hide from him. He can see that the Ukraine war, while it's debatable just how well Russia is doing, definitely wasn't the 1 month stomp campaign many expected. He can see that the Chinese economy has had some major setbacks with their housing market having a crisis and Evergrande collapsing.
The benefits to invading Taiwan are basically two: To appeal to the nationalistic ego of the masses, and to inflate his own personal ego, with military conquest. My understanding is that the Chinese masses do have nationalist egos and like being the big scary country on the block, as do most masses(until they get into a brutal war for no real benefit like WW1, WW2, Vietnam, Iraq 2, and get reminded painfully of the downsides. But I don't think they're extremely jingoistic, they're not Germans in 1938 or Americans in 2002.
As for Xi's internal psyche and how eager he personally is for war, it's very hard to know. China generally hasn't been that militant in recent years. Their last major conflict was the Sino-Vietnamese War in 1979, long before Xi. They're had some grandstanding around the South China Sea, and some skirmishes with India. Maybe he is more on the pacifist side and doesn't want conflict with no tangible benefit. Maybe he's just biding his time until he has the largest possible advantage over the USA to strike. Maybe he personally isn't that into war, but wouldn't back down or disavow an overeager admiral who escalates tensions during a patrol around Taiwan and that leads into war.
In conclusion, I really don't know. I just feel like focusing on what benefits China is a mistake, the focus should be on what Xi is thinking.
I tried to set up a (real-money) bet with someone over this (well, technically on nuclear war, but these have very high correlation), but was unable to finalise terms. There are a number of issues with betting "yes":
#1-3 can be solved with some innovation, although they make things more complicated. #4 is just a straight-up "prediction markets will underpredict this because equilibrium price =/= real probability".
NB: I have taken some steps to survive nuclear war (moving to Bendigo instead of Melbourne, bottled water in my bathroom cabinet), so I've put some money where my mouth is already.
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