China needs Taiwan to fail because the Chinese Communist Party maintains that democracy is incompatible with the Chinese culture. Having a very successful Chinese democracy shows that Chinese culture is compatible with democracy.

In a similar way, capitalists do everything they can to scuttle socialist countries, because a working socialist country would show that it was viable. Hence endless embargoes, wars, and a steady stream of propaganda. This was true for the entire life of the Soviet Union, and continues to this day for socialist countries.