China has a fundamental national myth of a great struggle and victory completed so lets avoid bloodshed and war that caused it. Their story of past trauma causes present stability.
It's this idea of: "we are all in it together let's not rock the boat because last time millions died" that unites their country.
Proxy wars, soft power, buying third world UN votes is more their rule book. That said, threatening war and invasion of Taiwan is also what they have done for decades...
In fact, you can imagine a blockade of Taiwan being introduced to enforce Chinese sanctions that are levied in direct response to American sanctions etc. that could well be the escalation path that china chooses
