How do you go from there - economic dependence and decreasing recognition - to not being self sovereign? They run a government and have elections. As another hexbear pointed out

At a basic level, to be a sovereign country is for the people of that country to have the ability to determine their own collective destiny. Now, sovereignty is not a simple binary but a scale since powerful countries have the potential for greater influence than smaller countries who must fight against the influence of larger countries.

Vietnam has sovereignty. It has an independent military that is battle-tested through winning numerous wars against its neighbors and the US, it has a seat within the UN where it can lobby its interest before a global body of nations, it has international treaties with numerous countries and is free to sign more or back away from treaties if it's in its geopolitical interests, it is part of many international organizations like ASEAN, and it has an extremely savvy ruling party who knows how to play off the blocs against each other for Vietnam's benefit. It's even taking steps to be completely food independent so they won't get fucked over by sanctions and climate change. The only real mark against their sovereignty is the PRC (and ROC) presence in the SCS.

Taiwan, in contrast, has little to no sovereignty. Its military is completely dependent on the US. If it wasn't for the 7th Fleet constantly bailing out Taiwan, Taiwan would've long since been reunited with the Mainland. It has no seat in the UN. A grand total of 12 UN states, many of them Pacific islands that Taiwan constantly bribes for their continued recognition, plus Vatican City recognizes Taiwan. Because Taiwan is not a UN state, it cannot belong to a lot of organizations. Just a few days ago, Taiwan got expelled from the Central American Parliament. The Central American Parliament isn't some hugely important organization and that's part of the point. Taiwan has already been shut out of important organizations like the UN and the WHO and now they're even being shut out of even less important ones. Taiwan has to compete in the Olympics under the humiliating title "Chinese Taipei" and instead of boycotting the Olympics, they choose to compete with that humiliating title, further cementing their inability to move beyond what the PRC and the rest of the world has placed them in. Neither the KMT and nor the DPP are pursuing policies that would bolster Taiwan's little sovereignty, with the KMT thinking if they can kiss the PRC ass enough times, the PRC won't invade Taiwan and with the DPP thinking if they can lick Uncle Sam's boots enough times, the US would save Taiwan and not abandon them like the US did with Afghanistan. Taiwan is also overly dependent on trade with the PRC and in general, Taiwan's economy is intertwined with the PRC, meaning if the PRC does shit like temporary ban some Taiwanese imports, the entire economy feels the strain.

This is a country that's economically dependent on one country and militarily dependent on another country. This is not a sovereign country. This is a pawn that's being played by two countries that are belligerent with each other.