china will not use Nuke over taiwan. its sucide, the only way china will ever use nuke is if china are invade by foreign country or all their nuke are target or suffer enormous civilian death. and not just border invade but a full scale invasion. hence non first use suit their need, since i doubt any country will do that to china in a limited SCS/taiwan conflict
US is more than capable to destroy chinese navy in SCS. although decade of chinese military upgrade make a little bit harder than before. military confrontation between US and china just too small, whether is taiwan or SCS. china has too much too lose and not much to gain by force the issue on taiwan/SCS, thats why it go for softpower. recent warming relationship between china/taiwan indicate this, by throwing $$$ to taiwan, allow taiwan investment, and economic ties between them etc, which force taiwan to become VERY dependent on china.