U.S. Deal With Taiwan Has China Retaliating

New York Times

This article doesn't really pertain to energy use in China, but is interesting non-the-less.

HONG KONG — The Chinese government announced late Saturday an unusually broad series of retaliatory measures in response to the latest United States arms sales to Taiwan, including sanctions against American companies that supply the weapon systems for the arms sales.

The Foreign Ministry announced in a pair of statements from Beijing that some military exchange programs between the United States and China would be canceled in addition to the commercial sanctions. Furthermore, a vice foreign minister, He Yafei, has called in Jon M. Huntsman Jr., the United States ambassador to China, to protest the sales.

The American decision to sell more weapons to Taiwan “constitutes a gross intervention into China’s internal affairs, seriously endangers China’s national security and harms China’s peaceful reunification efforts,” Mr. He said in the ministry’s statement.

The Obama administration notified Congress on Friday of its plans to proceed with five arms sales transactions with Taiwan worth a total of $6.4 billion. The arms deals include 60 Black Hawk helicopters, Patriot interceptor missiles, advanced Harpoon missiles that can be used against land or ship targets and two refurbished minesweepers.

China has regarded Taiwan as a breakaway province ever since the Communists prevailed in 1949 in China’s civil war and the Nationalists retreated to Taiwan. The United States has been supplying Taiwan with arms under the Taiwan Relations Act, which Congress approved in 1979 and which mandates that the United States supply weapons that Taiwan could use to fend off an attack by mainland Chinese forces.

Canceling military discussions and calling in the American ambassador have been two standard Chinese measures in response to previous American arms sales to Taiwan. But the announcement of restrictions on the Chinese operations of American companies involved in the arms sales represents an unusual twist, said James C. Mulvenon, the director of the Center for Intelligence Research and Analysis, a defense analysis firm in Washington.

The Foreign Ministry’s statement that mentioned the commercial sanctions was vague, providing no details on the restrictions that would be imposed on these companies’ business dealings in China or even what companies would be involved.

The United States has occasionally imposed bans on exports to the United States by Chinese companies that have violated international agreements on weapons proliferation, most notably penalizing Chinese companies involved in alleged surreptitious shipments of medium-range missiles to Pakistan.

But China is going a step further in moving to penalize American companies engaged in commercial arms transactions that are publicly announced and do not violate international nonproliferation pacts, Mr. Mulvenon said.

“I am a little baffled how the Chinese can sanction the U.S. companies as political retaliation while staying in keeping with their commitments to the W.T.O.,” he said.

The World Trade Organization generally prohibits the imposition of import restrictions as political maneuvers. But the body’s rules include a broad exception for national security that China could cite if the United States tried to challenge the propriety of China’s measures.

China has also never joined the W.T.O. side agreement on government procurement, despite promising to do so as soon as possible when it joined the organization in 2001. So China could bar the American companies from selling to the government without fear of W.T.O. review.