China Imposes Sanctions on US Military Contractors in Response to Arms Sales to Taiwan
China has imposed sanctions on two of the United States’ largest military contractors, Lockheed Martin Corporation and Raytheon Technologies Corp., in response to their arms sales to Taiwan. The Chinese Commerce Ministry announced the sanctions on Thursday, placing the companies on its “unreliable entities list”, which bars them from engaging in import and export activities related to China, and fines them twice the contract value of their arms sales to Taiwan since September 2020, when the list first came into effect.
The US is Taiwan’s main supplier of military equipment, and the two companies have been involved in the supply of radar, helicopters, air traffic control equipment, and missiles. Raytheon Missiles and Defense, part of Raytheon Technologies Corp, was awarded a $412 million contract in September to upgrade Taiwan’s military radar as part of a $1.1 billion package of US arms sales to the island, while Boeing Defense received a $355 million contract to supply Harpoon missiles.
The sanctions come in response to the US’s handling of a suspected Chinese surveillance balloon that entered US airspace late last month. China maintains that the balloon was a civilian research aircraft accidentally blown off course, while the US intelligence officials are assessing the possibility that the suspected spy balloon was not deliberately maneuvered over the continental US by the Chinese government, but was diverted off course.
Ties have already been drastically affected by the incident, leading to the delay of US Secretary of State Antony Blinken's expected visit to China this month. Last week, the US also blacklisted six entities in China that it says are linked to aerospace programs, including balloons, used by the military for intelligence. President Joe Biden is expected to make remarks Thursday about the Chinese balloon and three other objects that were recently shot down by US jets.
China regards Taiwan as a renegade province to be reunified, by force if necessary, and Beijing has long complained about the US supplying weapons to the island. The Chinese government has threatened sanctions against US entities that damage its national security in the past, and the companies’ senior managers will have their work and residence permits canceled and be barred from entering the country. The move also acts as a retaliatory framework to penalize companies that comply with US sanctions.
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