Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China’s Media Hints at Sanctioning U.S. Defense Firms Over Taiwan

EconomyJul 15, 2019 12:00PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Bloomberg. US-made CM-11 tanks (in background) are fired in front of two 8-inch self-propelled artillery guns during the 35th

(Bloomberg) -- Chinese state media raised the specter of backlash against U.S. companies including General Dynamics Corp (NYSE:GD). and Honeywell International Inc (NYSE:HON), as the foreign ministry warned firms would be sanctioned if a potential $2 billion arms sale to Taiwan goes ahead.

Firms including General Dynamics, Honeywell, Oshkosh Corp., Raytheon (NYSE:RTN) Co. and the Pennsylvania operations of BAE Systems (LON:BAES) were cited as having been involved in recent arms sales to Taiwan. The Communist Party’s flagship People’s Daily newspaper said their non-defense businesses in China may be “boycotted” in an article circulated on WeChat, without specifying what that would entail. State broadcaster CCTV and news agency Xinhua carried similar stories.

China is the third-biggest market globally for luxury jet maker Gulfstream Aerospace Corp., a General Dynamics subsidiary, the People’s Daily said, adding that the company is eager to display its products at the biennial airshow in Zhuhai. It also said that Honeywell’s air-conditioning systems are widely used in China, and Oshkosh makes fire trucks that are used in more than 60 airports across the country.

"In order to safeguard the national interest, China will sanction U.S. companies involved in the weapons sale," China Foreign Ministry spokesman Geng Shuang said at a regular briefing in Beijing on Monday. "The Chinese government and Chinese enterprises will not cooperate and conduct business with these American companies."

"The specific details are not disclosed at present, but please believe that the Chinese have always followed through on their words," he said.

Chinese Foreign Minister Wang Yi on Friday warned the U.S. it was “playing with fire” by approving the arms sale. Commerce Ministry spokesman Gao Feng said last week China would release a list of so-called unreliable entities soon, which the government has said will include firms that threaten national security.

Flash Point

U.S. military support for Taiwan, which has continued despite Washington’s decision to cut official diplomatic ties with Taipei in favor of Beijing 40 years ago, has long been one of the biggest sticking points between the two countries. While China considers Taiwan part of its territory, the island provides a vital link in a chain of American security partnerships in Western Pacific.

Taiwan has reemerged as a potential flash point amid U.S. President Donald Trump’s trade dispute with Chinese counterpart Xi Jinping. Meanwhile, Taiwanese President Tsai Ing-wen, who hails from a pro-independence party, has courted U.S. backing, holding an unprecedented phone call with Trump before his 2017 inauguration. Tsai recently stopped over in the U.S. on a trip to visit Taiwan’s diplomatic allies in the Caribbean.

China’s warning “shows the degree to which Taiwan is the most sensitive issue for Xi Jinping,” Kelsey Broderick and Michael Hirson of New York-based consultancy Eurasia Group said in a note. “Beijing has somewhat limited willingness to impose harsh actions on Taiwan directly, for fear that harsh actions would backfire and draw support for Tsai.”

China has threatened to impose penalties on companies involved in arms sales to Taiwan before, but has kept them informal and discreet, according to Eurasia. In 2015, it lodged a formal complaint protesting a $1.83 billion sale.

The potential sale, which was first reported by Bloomberg News in June, is estimated to cost about $2 billion, according to the Pentagon statement. The weapons and equipment requested by Taiwan include Stinger missiles, 108 M1A2T Abrams tanks, as well as hundreds of machine guns, smoke grenade launchers and ammunition.

(Updates with foreign ministry comment in fourth paragraph.)

China’s Media Hints at Sanctioning U.S. Defense Firms Over Taiwan
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email