China to Impose Sanctions on U.S. Companies Involved in Arms Sales to Taiwan
(Source: Xinhua; issued July 12, 2019)
BEIJING --- China will impose sanctions on U.S. companies involved in arms sales to Taiwan, foreign ministry spokesperson Geng Shuang said on Friday.

Geng's comments came after the United States earlier announced a plan of selling weapons worth 2.22 billion U.S. dollars to Taiwan.

The arms sales to Taiwan by the United States are serious violations of the international law, the basic norms of international relations, the one-China principle and the three joint communiques between China and the United States, Geng said, adding that the sales undermined China's sovereignty and national security.

"In order to safeguard national interests, China will impose sanctions on U.S. companies involved in the arms sales to Taiwan," Geng said.

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China Can Effectively Sanction US Companies Who Sell Weapons to Taiwan: Experts
(Source: Global Times; issued July 15, 2019)
The US is deploying a double standard by calling China's proposed sanctions on US companies for arms sales to Taiwan a "foolish action," Chinese mainland analysts said on Sunday, pointing out that the sanctions could not only cut base material supply to these companies including rare earths but also block their non-military products from entering Chinese markets.

After the US government approved a plan to sell $2.22 billion worth of arms to Taiwan, Chinese Foreign Ministry spokesperson Geng Shuang announced at a routine press briefing on Friday that to safeguard national interests, China would impose sanctions on US enterprises participating in the sales.

Citing data released by the US Department of Defense, Chinese state-owned media identified these firms as Raytheon that provides Stinger missiles, General Dynamics that provides M1A2T tanks, and BAE and Oshkosh that provide tanks equipment.

US Senator Bob Menendez, the top Democrat on the Senate Foreign Relations Committee, told media that it was a foolish action as the companies that would possibly be sanctioned were not very much going to be engaged in defense industry sales to China, according to a short video VOA Chinese posted on its Twitter account on Sunday.

In response, Xu Guangyu, a senior consultant at the China Arms Control and Disarmament Association, told the Global Times on Sunday that these US arms companies seem to not have an arms trade connection with China, but this is just in terms of final product.

A final product is based on many components built by a whole industrial chain in which China plays important roles, Xu said, noting that China could freeze the industrial chains related to these companies, or stop providing certain base materials.

Rare earths, the industry which is largely controlled by China, are imperative in making advanced weapons and equipment. For instance, the M1A2 tank of General Dynamics uses samarium-cobalt in its navigation system, according to a UK-based Daily Telegraph report in 2011.

The US Department of Defense is assessing the US rare earths capability to secure a stable supply amid the country's trade conflict with China, Reuters reported on Saturday.

Industry insiders warned that these companies' non-military businesses could also be affected. General Dynamics is not only the manufacturer of the M1A2 tank, but also the parent company of Gulfstream, an aircraft company whose private jets are reportedly favored by Chinese billionaires.

Gulfstream is the earliest foreign business jet-maker that entered the Chinese market decades ago and certain types of its jets such as the Gulfstream G650 are now popular among China's wealthiest, a senior executive of a Beijing-based business aviation integrated service provider told the Global Times. He asked not to be fully named.

A business jet is priced between $20 million and $70 million, he said, which means that losing the Chinese market could strike a huge blow to the US company.

Industry insiders said that one of the punitive measures could be ordering Chinese banks and financial institutions to reject loans to transactions related to Gulfstream, as almost all business jets are sold via a mortgage financing model.

Gulfstream's Chinese clients include the founder of Alibaba Jack Ma Yun and Wanda Chairman Wang Jianlin, media reported.

The website of General Dynamics China branch became inaccessible on Sunday.

"US arms sales to Taiwan constitute a serious violation of international law and the basic norms governing international relations. This is a serious violation of the one-China principle and the three China-US Joint Communiqués," Geng said on Friday.

He also expressed China's opposition to Taiwan regional leader Tsai Ing-wen's transit in the US, urging the US side to cancel arms sales immediately and stop the official exchange with Taiwan.

Chinese mainland analysts stressed that the decision to launch sanctions underlined China's firm opposition to arms sales to Taiwan.

Firm opposition

The simplest measure to punish these companies was to ban their business in China, Shi Yinhong, director of Renmin University of China's Center for American Studies in Beijing, told the Global Times on Sunday.

Lessons could also be drawn from precedent. On December 17, 2015, then foreign ministry spokesperson Hong Lei announced that neither Chinese governments nor Chinese enterprises would cooperate with companies involved in US arms sales to Taiwan. Companies involved at that time were Raytheon and Lockheed Martin.

Apart from sanctions, some Taiwan media is also interpreting an exercise by the People's Liberation Army near the southeast coast as the Chinese mainland's expression of opposition to arms sales.

The Chinese Ministry of National Defense said in a statement Sunday that the exercise was part of their regular arrangement according to the annual schedule.

By criticizing China's sanctions on US arms firms as foolish action, the US is obviously applying a double standard as the US has imposed sanctions on China that are even more useless and stupid, the analysts said.

In September 2018, the US imposed sanctions on China's Equipment Development Department, the military branch responsible for weapons and equipment, and its director, Li Shangfu, for buying Su-35 fighter jets and S-400 surface-to-air missile system from Russia, claiming this was against a US sanctions law punishing Russian government for meddling in the 2016 US election, Reuters reported.

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