Uh, No, and at least not for 20 years or more. China's economy right now is not, repeat not, built for war. They are dependant on foreign investment, money that would be completely cut off by invading Taiwan. Not to mention what harm it would do to the overall world economy.
Yes exactly. Who is currently supplying the impetous for all of their economic development? The United States and the EU both of which would, at the least, call on sanctions of China and Chinese goods or actually prepare a full scale war against China.
If a war between the US and China became a reality it would almost certainly end in a US victory. Chinese naval assets are mostly old Soviet equipment which wouldn't stand a chance against American naval forces rendering an amphibious invasion of Taiwan complete suicide if US forces are in the area.
On the ground it would be much different. While we have the more advanced technology they have a distinct advantage in numbers at the beginning of the war, outnumbering the entire US Army by over 2:1 not including National Guard and Civil Defence elements. It would be a hard fought war probably on the scale of WWII in size and scope although help from other Asian nations plus EU countries would help the American side if Russia stays neutral in any conflict.
In a nuclear engagement any Chinese officials would know that he is screwed, utterly and completely. The Chinese have about 35 missles capable of reaching targets in the continental US as compared to the over 1500 such devices in the American arsenal. Which basically means that any Chinese leader would have to succomb to the fact that if he launches his weapons his entire country would be reduced to radioactive slag, a very strong deterent against the starting of a nuclear war.
Russian involvement would be key. While I see them as mostly staying neutral in the conflict it is likely that they would actually join the American side due to a mutual distrust between China and Russia. India would also be a major factor. Again there are unresolved conflicts between those two powers that may force the Indians into the American camp, as well as the spectre of a militarily dominant Asian superpower in China dominating the subcontinent.
Lastly why in the name of hell do you think China will attack Taiwan in 2006? They have no reason to and unless Hu Jintao and Wen Jiabao have been smoking crack cocaine for the last year and a half would not commit themselves to what basically accounts for national suicide.