Yes it is bonkers, indeed!
Yet, it is EXACTLY what Xi repeatedly said in his new-term-inauguration speech
The dictator of China has effectively declared, as publicly as possible, and very specifically, that he intends to invade Taiwan if it does not willingly abandon it's democracy and come under China's rule
He obviously thinks he can get away with doing so without consequences, including those you suggest.
Yet, leaders make such mistakes all the time. Putin just made one on 24-Feb-2022.
It is up to the western world to ensure that Xi sees that such an action would result in bad consequences for him, and deter him from his stated course.
But the fact that it is bonkers is no assurance whatsoever that it won't happen.
