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China sanctions five US defense firms on Taiwan arms sales

Bloomberg
Bloomberg • 2 min read
China sanctions five US defense firms on Taiwan arms sales
The companies affected include BAE Systems Land and Armament, Alliant Techsystems Operation, AeroVironment, ViaSat and Data Link Solutions, the Chinese foreign ministry said in a statement Sunday. Photo: Bloomberg
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China announced fresh sanctions on five US defence industry companies, in response to the latest arms sales deals to Taiwan.

The companies affected include BAE Systems Land and Armament, Alliant Techsystems Operation, AeroVironment, ViaSat and Data Link Solutions, the Chinese foreign ministry said in a statement Sunday. The measures consist of freezing the properties of those companies in China, and prohibiting organizations and individuals in China from transactions and cooperation with them, it said.

The sanctions are a result of “gravely wrong actions” taken by the US and in accordance with China’s Anti-Foreign Sanctions Law, the ministry said. The measures were also due to “illegal unilateral sanctions” on Chinese companies and individuals, it added.

The decision is seen as the latest retaliation to the US State Department’s approval of an estimated US$300 million ($399.2 million) in possible foreign military sales to Taiwan disclosed in mid-December. The Chinese People’s Liberation Army has intensified military training and readiness around the Taiwan Strait since the deal.

It was unclear what impact the sanctions would have on the US firms, if any. American defence manufacturers and military service providers generally don’t conduct any business activities in China, and such sanctions are often seen as mostly symbolic.

This isn’t the first time that China has sanctioned US companies for weapon sales to Taiwan, a potential flash-point between the world’s two biggest economies and military superpowers. Early last year, China put Lockheed Martin Corp. and Raytheon Missiles & Defense on its unreliable entities list, and banned them from engaging in China-related import or export activities and making new investments in the country.

See also: Temasek hunts for domestic bets with geopolitical tension rising

Although Taiwan has been self-ruled since the end of China’s civil war in 1949, the government in Beijing views the island as a renegade province. China has long complained about the US supplying weapons to Taiwan, saying sales were “in blatant violation” of the one-China principle and the stipulations of the three US-China joint communiqués.

In last month’s statement, the US said the proposed sale would help Taiwan modernize its armed forces and “assist in maintaining political stability, military balance, and economic progress in the region.” 

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