China says will freeze out U.S. companies that sell arms to Taiwan

[July 15, 2019]  By Ben Blanchard

BEIJING (Reuters) - China's government and Chinese companies will cut business ties with U.S. firms selling arms to Taiwan, China's Foreign Ministry said on Monday, declining to give details of the sanctions in a move likely to worsen already poor ties with Washington.

China claims self-ruled and democratic Taiwan as its own and has never renounced the use of force to bring it under Beijing's control. China regularly calls Taiwan the most sensitive issue in its relations with the United States.

Last week, the Pentagon said the U.S. State Department had approved the sale of the weapons requested by Taiwan, including 108 General Dynamics Corp <GD.N> M1A2T Abrams tanks and 250 Stinger missiles, which are manufactured by Raytheon <RTN.N>.

China said on Friday it would sanction U.S. companies selling weapons to Taiwan but did not elaborate.

The latest deal involves $2.2 billion worth of tanks, missiles and related equipment for Taiwan.

Chinese Foreign Ministry spokesman Geng Shuang said the arms sales were a violation of international law and harmed China's sovereignty and national security.

"China's government and Chinese companies will not cooperate or have commercial contacts with these U.S. companies," he told a daily news briefing.

"I can't reveal the details at the moment. But believe this - Chinese people always stress standing by their word."

On Sunday, the ruling Communist Party's official People's Daily posted an article on its WeChat account identifying U.S. companies that could be vulnerable to sanctions.

They included Honeywell International Inc <HON.N>, which makes the engines for the Abrams tanks, and private jets maker Gulfstream Aerospace, which is owned by General Dynamics. China is an important market for both Honeywell and Gulfstream.

A military honour guard holds a Taiwanese national flag as he attending flag-raising ceremony at Chiang Kai-shek Memorial Hall, in Taipei, Taiwan March 16, 2018. REUTERS/Tyrone Siu/File Photo

The companies did not respond to requests for comment.

Ties between China and the United States are already strained over a trade war, which has seen them levy tariffs on each other's imports.

This is not the first time China has said it would sanction U.S. companies selling weapons to Taiwan. China has announced such steps at least twice before - in 2010 and 2015 - but it is unclear if the sanctions were ever imposed.

U.S. defense contractors have been barred from dealings with Beijing since China's bloody crackdown on pro-democracy demonstrators on and around Tiananmen Square in 1989.

While its relations with Taiwan are technically unofficial, the United States is required by law to assist Taiwan in its defense and is its main supplier of arms, though France has also previously sold warships and fighter jets to Taiwan.

China has been angered as well by the United States allowing Taiwan President Tsai Ing-wen to visit last week, on her way to diplomatic allies in the Caribbean. She is due to transit the United States again at the end of her trip next week.

(Reporting by Ben Blanchard; Additional reporting by Liangping Gao, Yilei Sun and Stella Qiu; Editing by Nick Macfie)

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