China is a huge country made up of dozens of ethnic minorities. Even the Han majority has dozens of ethnic subgroups. The "One China" policy of Xi and his predecessors has largely been an attempt to keep China from exploding into a dozen different civil wars as minority groups seek independence and come into conflict with other minority groups.
China has always given Taiwan a great deal of independence. But whenever Taiwan talks about actually declaring independence, China gets very belligerent. This is largely due to the precedent that it would set for a dozen other Taiwan-wannabees across China. This is also why China has so brutally dealt with Uyghur separatists.
Taiwan's status as a republic of China works just fine and there is no reason for Taiwan to seek independence. China has no interest in provoking conflict with Taiwan as long as Taiwan does not seek independence.
The US talks about sending weapons to Taiwan to help Taiwan defend itself from invasion. But China sees US weapons shipments as an effort to build strategic forces to be able to blockade Cina in the South China Sea and effectively cut China's major sea route off in the event of a conflict. China is probably right about that as the US has been piling military resources into the Philippines for years.
Of course, that is not to say that China should get everything it wants in the S. China Sea. But both sides have shown little interest in compromise because the US has been willing to back anyone opposed to China's plans for the S. China Sea and when the US has your back, you don't need to back down.
An armed conflict over Taiwan or the S. China Sea would be absolutely stupid and potentially could lead to nuclear brinksmanship. These are conflicts that could be easily resolved through diplomacy or at lease kept in a state of détente by the US stopping sending tons of bombs to the region and letting Taiwan know that independence is not in the cards.
