China is converting older frigates and destroyers to APDs (fast transports). At the rate the conversions are going, China will soon have at least eight APDs. The first to be converted are the Jianghu class frigates, which were built in the 1970s and are now being retired. To create an APD, most weapons are removed from these frigates, with the now empty spaces modified to transport cargo or troops. The 1,800 ton Jianghu’s have a top speed of about 46 kilometers an hour. This enables APDs to move quickly, especially during darkness, to reach their destination. Shorter travel time makes the APDs less vulnerable to attack (and easier to defend, especially if you have to keep fighters overhead.) Taiwan is 300 kilometers from the Chinese coast. Each APD could carry several hundred troops, or a few hundred tons of cargo.
As long as people only measure amphibious capabilities by using the US Marines as the standard, China will look incapable of mounting an invasion of Taiwan.
But if you accept that a baling wire and duct tape invasion [old link updated] that results in high casualties as the price of winning is something Peking would accept, China's capabilities don't look insufficient at all.
APDs are just another sign. And you don't need to strip a ship to carry troops. Other obsolete warships could carry minimal ammo and crew and still carry a company or so of troops.
Amphibious assault will be a summer Olympics event in 2008.
