They know they'd lose if the USN shows up. It is all predicated on us staying out, whether because they have the right kind of coward in the White House, or there is enough trade money on the line, or they can threaten to hit a few of even our ships, or LA for that matter, or we are too busy dealing with the proxy troublemakers they've set in our path and armed (from North Korea to the Sudan). If they think we might not, they won't go. Not for cost reasons, but because they know they'd get their tails kicked.
Just Taiwan, on the other hand, they are gearing up to be able to take. The land force "we are all Japanese in coral bunkers who will fight to the last man" line is silly. The Chicoms aren't worried about that and they've no real reason to be. The question is does their shipping get sunk or does it get enough men over and keep them supplied.
As for their conventional warhead missiles, they have no military significance. They make for saber rattling, that's all. They aren't accurate enough to hit e.g. an airfield, as opposed to a whole city. Missiles that inaccurate either use nukes or do next to nothing. They don't need 500 of them to use nukes.
As for the idea they can't try it or won't, that might be naive. Dictators do dumb things all the time, that lose and get them smacked. Being surrounded by apple polishers is not conducive to rational assessment of risks, people make mistakes, some don't care what happens to those they shovel around.
The thing to focus on is making sure if they go, they get sunk in the Taiwan strait and lose. If that is clear enough that they don't go, great. If they go anyway, so sorry, sink their fleet, Taiwan survives. The target is not their will in the matter but their capabilities. Outmatch those and the worst that happens is they break a lance for the stupidity of tyrants.