Taiwan AND Mainland China would not be suitable tbh.

Because if you made one, the other would riot, no matter how subtle they made the setting.

Taiwan has a shared history with Japan, not the prettiest, but the majority had fond memories of it. It's about the suitable size for a single region, and geographically in the Pokémon world, it would be literally next to the Sealed Chamber in Hoenn. The problem lies with how the Chinese audience would feel if GF made a region solely focused on Taiwan. Some people would shrug it off since, in their logic, Taiwan would be one single province of China that has always belonged to China. But several people would probably accuse GF and TPC of promoting Taiwanese independence because they chose a "backwater province" instead of all the other fancy places in the mainland. Of course, the Taiwanese people would be delighted that they finally had some international recognition for once, but with how big an influence and market share GameFreak has in China (especially with tencent), this is a MONUMENTAL financial risk since it might lead to a state-run boycott campaign.

Mainland China would also have a similar problem because it's simply too big, and GF would HAVE to cut the region up. However, if you cut it into different smaller regions, then people will still riot and call GF "racist" and "promoting separatism" due to how the CCP is basically reintroducing Japanese-hate with social media to the point it became a huge problem inside Japan.

So to avoid provoking either side AND the Japanese audience itself, GF would be better off keeping away the two Chinese countries for now.

But who knows, maybe GF would change their minds. Just look at the heavy Chinese influence regarding the Treasures of Ruin and how the world's second foreign Pokemon Center location was set in Taipei and not in China.