It's not Taiwan's choice. They wanted F-35s, but were forced to buy F-16Vs. They were actually forced, the US even tried convincing them to get rid of the M2000.
As for Rafale, AFAIK, Taiwan is willing to buy the Rafale, but France isn't willing to upset China. Macron was clear about that, so was the French military, both want to keep France and NATO away from China. There's the problem with US pressure too in not wanting allies getting comfortable with the French. But with new geopolitical realities of today, it's possible that France can change its mind. For example, Taiwan may try persuading the French to allow Rafale sales in exchange for the M2000 upgrade. But if that fails, they may kick France out of their market by selling it to someone else.
This will be Macron's last term and it's possible that the next administration will change its mind.
Taiwan's also interested in developing a stealth jet, so a Rafale purchase could pave the way for cooperation.
Anyway, fighter jets with AESA and IRST can fight the J-20.
Taiwan's Ministry of National Defense (MND) said Thursday that a proposed arms package, comprising infrared search and track systems (IRST) for the country's fleet of F-16V aircraft, will vastly improve their long-range detection and target tracking, significantly boosting its air-to-air combat...
focustaiwan.tw
Due to the J-20s specially designed fuselages that reduce radar reflections, when a radar system picks up the signal of a J-20, it is often closer than indicated, Chieh said.
With the help of the IRSTs, pilots will be able to determine earlier how close the enemy aircraft are, thereby gaining more response time, Chieh said.
It's still a huge disadvantage, but it's still possible. Anyway, it's very likely that the US will come in with F-22s and F-35As during war.