Of course Taipei appreciates any thorn in the side of Beijing. They know that Japan does not have the restrictions that they do as far as ability to purchase certain advanced weaponry from the international (US) market.
And lets be real here. The Taiwanese government isn't blind. They aren't so sure anymore that the US is going to come to the rescue in a hot war with China. They want new friends who they can attempt to sell the fact that they have a common goal in defending against Chinese aggression.
As far as which nation the Chinese military modernization is "aimed" at, I believe that is a faulty premise for a discussion. Obviously they are trying to counter US influence in their backyard, and are using the US armed forces as their mold as well as their measuring stick. But they have no intention of a direct conflict with the US military, so I wouldn't say its "aimed" that way.
I believe the overhaul and technology/infrastructure advancements are aimed at restoring national pride, and preventing the wrongs of the 20th century from ever happening again. I believe the population expects a military might to match its well known economic superpower status. Now, will there be some collateral damage due to the inherent need for boys to use their toys once they have them? Do tools always get used for their original purpose? I wish I could say no.
China will test and display its new weapons and tactics in a limited campaign, similar to the Gulf war in 1991. I doubt it will be against Japan or South Korea, so that leaves a few prime candidates who no doubt realize who they are, and are extremely nervous about the next decade.