50% of people in Taiwan believe that China will invade if they declare independence.
So yes half of the country thinks it's a credible threat. [1, 2]
And only 6% think their situation has improved over this time last year. So "everyone's getting richer" certain isn't the perception in Taiwan.
1. Survey http://www.taiwansecurity.org/app/news.php?Sn=15761
I'm not taking a side on PRC vs ROC, maybe you're misunderstanding me. I just honestly thought it was taken for granted that that's pretty unlikely. All the talk about who's sovereign has been polite fiction for some time now.
(and, I'll admit I haven't done a ton of research on Taiwanese public opinion, but unless/until I do so, I'm going to take 'taiwansecurity.org' in English's takes with a grain of salt - Ahmed Chalabi sounded good too)
The survey was done by a Taiwanese University in cooperation with Duke University. If you want to dismiss it without doing any research then have at it.