- The Washington Times - Monday, February 1, 2010

China’s reaction to the latest U.S. arms sale to Taiwan includes the first public warning that Beijing will impose sanctions on U.S. companies that sell weapons to the island.

Beijing also announced it is again limiting military relations with the Pentagon, upsetting a key element of Defense Secretary Robert M. Gates’ policy of engaging China’s military.

Chinese officials announced over the weekend they are cutting off most military exchanges with the Pentagon and will sanction U.S. defense companies involved in the latest arms package offered to Taiwan.

The Pentagon announced Friday that it had formally notified Congress of the proposed arms sale. It was the first new arms package since an October 2008 congressional notification.

The arms package includes offers to sell two mine-hunting ships, 60 UH-60 Black Hawk helicopters, 12 Harpoon anti-ship missiles, 114 Patriot PAC-3 anti-missile systems, and 35 ship-based communications systems. The total value of the arms sale, if Taiwan goes ahead with the purchases, is $6.392 billion.

“We regret that the Chinese side has curtailed military-to-military and other exchanges,” Pentagon Press Secretary Geoff Morrell said Sunday. “We also regret Chinese action against U.S. firms transferring defensive articles to Taiwan.”

Mr. Morrell said that as of Sunday the Pentagon had not received a formal notice of the Chinese sanctions or exchange cutoff. Ending exchanges likely will mean cancellation of planned visits to China this year by Mr. Gates and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff. Other exchanges that will be affected include exchange visits by U.S. and Chinese military officers and several ship visits.

Mr. Morrell said last week that Mr. Gates believes the U.S.-China relationship is too important to be disrupted by the “fits and starts” of recent years. “This relationship has to be important enough to both of us — not just us, both of us — to continue to focus on this and do the hard work it requires to continue to engage, even when times get tough,” he said Wednesday.

China’s announcement that economic sanctions will be imposed on U.S. companies that sell arms to Taiwan is a new response to arms sales, U.S. officials said.

Most of the U.S. companies involved in the latest arms sale are defense contractors who currently are barred from military sales to China under sanctions imposed after the 1989 military crackdown on unarmed protesters in Beijing’s Tiananmen Square.

However, one company that could be harmed is Boeing, which has a number of cooperative ventures with China on civilian aircraft. Boeing’s subsidiary, the McDonnell Douglas Co., is offering two types of advanced Harpoon anti-ship cruise missiles to Taiwan in the latest arms package.

A Boeing spokesman had no immediate comment on the Chinese threat to impose sanctions.

Sikorsky, the company that makes civilian passenger helicopters in addition to Black Hawks, also could be affected.

Raytheon and Lockheed-Martin, builders of Patriot PAC-3 systems, could be sanctioned as well.

Larry Wortzel, a former military attache posted to Beijing, said China in the past has reacted to U.S. arms sales by shifting some of its orders for commercial aircraft from Boeing to Airbus.

“The threats by Beijing this time are strong,” Mr. Wortzel said in an e-mail. “Actions by China could potentially affect Boeing and Sikorsky more than Raytheon and Lockheed Martin because the former two have more dealings with China. This is a slippery slope for Beijing, since it would likely trigger a reaction from the administration.”

Mr. Wortzel said in addition to attempted economic punishment, Beijing also could show its displeasure by providing more help to Iran, North Korea or Myanmar.

The latest arms package followed an October 2008 offer of arms worth about $6.5 billion. That arms sale triggered a cutoff of U.S.-China military relations that gradually were restored.

Chinese reaction to the arms sale so far has been outlined in official statements from the Defense and Foreign ministries that were published in Chinese state-run media.

The Defense Ministry Web site said China’s military chief of the general staff, Gen. Chen Bingde, had called off a planned visit to the United States this year.

A statement attributed to the Chinese Foreign Ministry said Beijing decided to “partially halt” military exchanges as well as calling off a vice-ministerial-level “consultation” on strategic security, arms control and arms proliferation that was to be held soon.

“China will also impose sanctions on the U.S. companies involved in the arms sales to Taiwan,” according to the Foreign Ministry statement.

Chinese press reports, quoting sources in the Foreign Ministry, also said China’s cooperation on regional and international issues would be affected, but no details were given.

The Obama administration has sought China’s support for new sanctions on Iran, but Beijing has opposed the effort. China’s cooperation on North Korea also has been limited.

U.S.-China military exchanges were launched in the 1990s and were limited by a 2000 law that prohibited exchanges that would boost China’s nuclear weapons or power projection capabilities. The law was passed after Chinese military visitors were detected gathering warfighting data from the exchanges.

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