Maybe the Chinese have now created their own worst nightmare...
This is what happens when you play escalatio with someone who is at least as technologically competent, and in this case more so.
Here we see a fairly typical case of short-sightedness and excessive belief in the status quo (i.e. that the scenarios that are postulated will come about and that the potential enemy is passive), rather than actually wargaming this out with intelligent people.
Mainland China is vastly more sensitive to infrastructure destruction than Taiwan is, simply because of the sheer size of the infrastructure needed to support over 1 bn people in comparison to that needed to support the 21 mn or so Taiwanese.
While China is threatening Taiwan with its 600 short- and medium range ballistic missiles, Taiwan is now setting up its own deterrent with several hundred indigenous cruise missiles. The difference is not merely numerical, but more fundamentally one of quality: ballistic missiles are in effect dumb bullets, since China lacks the kind of metallurgical and technical expertise needed to set up terminal guidance for ballistic missiles (the Russians can do this, and if they were to sell this technology, of course, to the Chinese, then the game is different) and hence these weapons are "only" area weapons. Cruise missiles, on the other hand, are a vastly more elegant solution and can achieve critical accuracies with marginal costs in comparison.
So what have the mainland Chinese done? They've created their own worst nightmare: if they were to attack Taiwan, then a Taiwanese counter strike is not limited to the Taiwanese air force, which would be fighting to prevent the mainland from achieving air superiority over Taiwan. Instead, the Taiwanese can target, legitimately so, mainland infrastructure supporting any attack: railheads, ports, POL and the utilitiy infrastructure. This means that the mainland has lost its relative invulnerablity: the mainland has always assumed that any counter attacks that Taiwan would undertake would be very limited and could be defended against using the literally hundreds of second-tier fighters tied into local command.
This relative sanctuary is now gone: any attack on Taiwan will require the PLA air force to dedicate as many of its first-rank fighters to anti-missile patrol, since only these fighters have a real chance of downing nap-of-the-earth cruise missile attacks. The second- and lower-rank fighters cannot win air superiority over Taiwan (the Taiwanese air force would decimate them at little cost of their own), and the use of massive ballistic attacks to eliminate the Taiwanese air force cannot, due to the nature of ballistic missiles (area weapons), be assumed to be easily achievable.
So here is an example of escalatio: Mainland China made the first move, of building up a large and threatening force of ballistic missiles, conventionally armed. Rather than acccepting the threat, Taiwan has now countered by creating its own counterforce capability that could devastate the economy of the mainland (I estimate no more than 50 successful strikes, with ca. 100 cruise missiles of the Tomahawk class, would severely impact the POL (petroleum, oil and lubricants) assets of the mainland, forcing the mainland economy to a halt. Add another 100 or so for key infrastucture (bridges and dams) and you can cripple the mainland economy to an unprecedented degree, ruining its ability to make war.
And that is what deterrence is all about.