A story from International Herald Tribune describes the possible strategies (with an emphasis on deterring potential U.S. military intervention) and consequences of a Chinese military takeover of Taiwan, were it to occur:
For almost six decades, U.S. military power has frustrated the ambition of China’s ruling Communist Party to unite Taiwan with the mainland.
With this U.S. security blanket in place, Beijing has been largely powerless to prevent the prosperous, self-governing island from becoming independent in all but name.
But, an increasingly wealthy China is now building a military force tailored specifically to challenge any attempt by the United States to intervene in a conflict over Taiwan, Western and Chinese military analysts say. [Full Text]