Defence sources have warned that China are "learning lessons" from the war in Ukraine and are keeping close tabs on the UK's "political will".
It came as the UK and Australia pledged to take action against the growing threat posed by Beijing in the Indo-Pacific region.
China has threatened to take Taiwan despite the island being self-ruled, as Beijing claims it as its own.
Defence sources have spoken to The Telegraph about the importance of the UK's actions over Ukraine, emphasising how it "sends a signal of our resolve elsewhere".
China's Xi Jinping has reportedly been studying the war in Ukraine closely.
CARLOS GARCIA RAWLINS
“The Defence Secretary has repeatedly said that what happens in Ukraine sends a signal of our resolve elsewhere, so not only are China watching but they are also judging our political will, as well as learning military lessons,” they said.
It is believed China has paid close attention to the war in Ukraine and the West's response to see what China's armed forces could learn.
A key takeaway China has taken is reportedly Western leaders taking two days to properly respond when Putin invaded Ukraine on February 24th.
Nancy Pelosi recently made a trip to Taiwan.
TAIWAN MINISTRY OF FOREIGN AFFAI
A further point noted in Beijing is the fact that Russia did not defeat Ukraine in this period of time, which they feel allowed Western support to grow.
China is reported to have concluded that a similar mistake in Taiwan will have to be avoided in order to avoid a long, drawn-out war.
Taiwan's unification with the mainland is part of Chinese plans to "revive" the Chinese nation by 2050, with Western governments fearing that a military offensive could arrive in the years to come.
Taiwansaid on Wednesday it would exercise its right to self defence and counter-attack if Chinese armed forces entered its territory, as Beijing increased military activities near the democratically governedisland.
Beijing, which claimsTaiwanas its own against the strong objections of theTaipei government, has held military exercises around the island this month in reaction to a visit to Taipei by U.S. House of Representatives Speaker Nancy Pelosi.
Taiwanese defence officials said China's "high intensity" military patrols nearTaiwancontinued and Beijing's intentiontomaketheTaiwanStrait separating the two sides its "inner sea" would become the main source of instability in the region.
"For aircraft and ships that entered our sea and air territory of 12 nautical miles, the national army will exercise right to self-defence and counter-attack without exception," Lin Wen-Huang,Taiwan's deputychief of the general staff for operations and planning, told reporters at a news briefing.
Taiwanhas complained of Chinese drones repeatedly flying close to its small groups of islands near China's coast.
The military will exercise the same right to counter-attack Chinese drones that did not heed warnings to leaveTaiwaneseterritory after posing threats, Lin added.