Traders assign an 88.5% probability that China will not invade Taiwan by the end of 2027, reflecting sustained gray-zone pressure rather than preparations for imminent large-scale amphibious operations. Chinese forces have maintained elevated but reduced air and maritime activity around the island in 2026, with fewer ADIZ incursions than prior years and a focus on coast guard patrols east of Taiwan to normalize presence and assert jurisdictional claims. Upcoming high-level U.S.-China diplomacy, including the planned September 2026 Xi-Trump summit, has coincided with temporary drops in sorties, underscoring efforts to manage escalation risks. Taiwan has responded with higher defense spending, accelerated drone and missile programs, and readiness exercises, while U.S. arms deliveries continue. These factors, combined with assessments of limited current PLA sealift capacity, support the market's view that full invasion remains improbable in the near term absent major shifts in deterrence or internal Chinese timelines.