China sanctions Lockheed Martin, Raytheon over Taiwan arms sales

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[February 16, 2023]  BEIJING (Reuters) -China's commerce ministry on Thursday put Lockheed Martin Corp and Raytheon Technologies Corp onto an "unreliable entities list" over arms sales to Taiwan, its latest sanctions against the two U.S. defense contractors.  

The logo of Lockheed Martin is seen at Euronaval, the world naval defence exhibition in Le Bourget near Paris, France, October 23, 2018. REUTERS/Benoit Tessier

The measures come amid heightened tensions after the U.S. military shot down what it says was a Chinese spy balloon, and a day after Beijing warned of "countermeasures against relevant U.S. entities that undermine China's sovereignty and security".

Lockheed Martin and Raytheon Missile and Defense Corporation, a subsidiary of Raytheon Technologies, are prohibited from "engaging in import and export activities related to China", the commerce ministry said in a statement.

Beijing also banned the firms from further investment in China, barred senior management from entering the country, canceled residence permits for any staff in China and imposed fines that are double the contracted amounts of their arms sales to Taiwan.

It is not clear how China would enforce such fines, which it said must be paid within 15 days.

Last February, China sanctioned the two firms over a $100 million arms sale to Taiwan, a self-ruled island which Beijing views as a breakaway province.

On at least two previous occasions China has announced sanctions against Lockheed and Raytheon, in 2019 and 2020, though Beijing has not explained what those sanctions entailed or how they were enforced.

The United States does not sell weapons to China. However, the United States is bound by the 1979 Taiwan Relations Act to provide Taiwan with the means to defend itself, and U.S. weapons sales always attract China's anger.

(Reporting by Tony Munroe, Laurie ChenEditing by Raissa Kasolowsky)

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