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International relations

China sanctions US companies over Taiwan arms sales

Foreign minister blasts Tsai's NY transit and says reunification cannot be stopped

A US soldier aims a Stinger missile launcher during a military exercise in South Korea. Washington has approved sales of Raytheon's Stinger missiles and related equipment worth $223 million to Taiwan.   © Getty Images

NEW YORK/BEIJING -- Beijing made clear its unhappiness Friday over the recent camaraderie between the U.S. and Taiwan, announcing sanctions against American companies involved in arms sales to the self-ruled island and reaffirming the eventual "reunification" of the two sides of the Taiwan Strait was inevitable.

Chinese Foreign Minister Wang Yi expressed "serious concern" over Taiwan President Tsai Ing-wen's stopover in the U.S. on her way to visit four Caribbean countries, urging Washington not to send "wrong signals" to advocates calling for Taiwan independence.

Wang's comments were made during a visit to Hungary and were carried by Xinhua News Agency. The escalating tension comes as China and the U.S. are trying to jump-start talks after declaring a truce in their trade war last month. 

China is seriously concerned about Tsai's "transit" in the U.S., Wang said, adding that China firmly opposes any official contact between the U.S. and Taiwan "in any form."

"No one or any force can stop the historical process of reunification between the two sides across the Taiwan Strait," Wang said.

Taiwan's President Tsai Ing-wen arrives at the U.S.-Taiwan business summit in New York on July 12.   © Reuters

In Beijing, Foreign Ministry spokesman Geng Shuang said in a statement that China will sanction American companies involved in arms sales to Taiwan.

"The U.S. arms sales to Taiwan constitute a serious violation of international law and the basic norms governing international relations," he said, referring to the approval this week of sales including 108 General Dynamics M1A2T Abrams tanks and 250 Stinger missiles, which are manufactured by Raytheon.

The deal is worth $2.2 billion, and, if approved by Congress, constitutes the largest single sale under the Trump administration as well as the largest arms sale to Taiwan since a $5.8 billion deal in 2011. 

"To safeguard our national interests, China will impose sanctions on the US enterprises involved in the above-mentioned arms sales to Taiwan," Geng said.

Tsai, who has played up the island's relationship with the U.S. in hopes of bolstering her reelection bid, landed in New York Thursday for a two-day stopover on her way to the Caribbean to visit Haiti, St. Kitts and Nevis, St. Vincent and the Grenadines and St. Lucia on a 12-day trip. The four islands are among the few countries that formally recognize Taiwan instead of China.

The Taiwanese president met with United Nations representatives of Taiwan's allies at a reception at the Taipei Economic and Cultural Office in New York.

"Taiwan may not be large, but we are an irreplaceable member of the international Community," Tsai said.

"I want to reiterate that Taiwan is not, and will never be, intimidated. The challenges we face only serve to strengthen our resolve to engage with the international community."

On Friday, Tsai attended the U.S.-Taiwan Business Summit, which also included representatives from American companies including the global investor KKR, Citigroup and Lockheed Martin as guests.

"In recent years, our trade with the U.S. has continued to warm, with increasing bilateral trade reflecting closer economic ties between our countries," Tsai told reporters ahead of the closed-door meeting.

Making time to attend the summit reflects that she "highly values U.S.-Taiwan trade relations," Tsai said, adding that she hopes the Taiwanese economy can "contribute more to the Indo-Pacific region."

Tsai also met with Richard Armitage, a former deputy secretary of state under George W. Bush, on the second day of her New York stay.

"Dr. Tsai Ing-wen was able to visit the United States on several occasions during her presidency, and each time I think the United States has gone out of its way to make it kind of special," Armitage told reporters Friday at the Grand Hyatt Hotel, where Tsai is staying.

When asked whether U.S. treatment of Tsai's visit this time is "better" compared with her previous trips, Armitage said, "Yes, I think it is."

"It comes right after an arms sale. It comes after an increase in exports to the United States. It comes after also some congressional action," he said, referring to a bill introduced in the Senate that calls on the U.S. to protect Taiwan from "Chinese pressure." "I think if you look at the direction U.S. has been going in during the Tsai Ing-wen presidency - [there has been] a lot more respect for the leadership of Taiwan and the Taiwanese people."

International think tank Eurasia Group described China's announcement of sanctions against U.S. companies over the arms sales as "very significant."

"If China follows through on sanctioning the US companies involved in the arms sale, it will be the first time it has taken this kind of action," the group said. "In the past, China has punished Taiwan for arms sales from the U.S., while threatening action against the U.S. but keeping actual penalties informal and discreet."

It said that the action shows how Taiwan is "the most sensitive issue for Xi Jinping," China's president, and that while Beijing still desires a trade deal with the U.S., "it is not so critical to Xi that he is willing to bend on sensitive issues."

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