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Boeing sales at risk after China sanctions threat

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Los Angeles Times
BEIJING — The Chinese government Saturday announced a series of harsh retaliatory measures in protest of the Pentagon’s $6 billion arms sale to Taiwan, including a suspension of security exchanges and threatened sanctions on U.S. companies selling to Taiwan.
The U.S. company most likely to be affected if China follows through on its threat to punish contractors is Boeing, which manufacturers the Harpoon missiles that are part of the Taiwan package. Boeing also sells commercial aircraft in China.
“The U.S. decision seriously endangers China’s national security and harms China’s core interests,” the Defense Ministry said in a statement attributed to spokesman Huang Xueping.
Denunciations from Beijing over arms sales to Taiwan have an element of ritual about them, but the threat of sanctions on U.S. arms contractors is a new one. It remains to be seen whether China will follow through, given its need for commercial aircraft and aviation systems.
“The United States has been telling China how much they need their cooperation on a range of issues from climate change to the economy. This has fed a sense from Beijing that they have more leverage than in the past,” said Bonnie Glaser, a senior fellow at the Center for Strategic and International Studies in Washington.
But in various statements Saturday, the Chinese government used the word “postpone” rather than cancel, hinting that normal dialogue will resume after several months.
On Saturday, the State Department defended the arms deal, saying, “such sales contribute to maintaining security and stability across the Taiwan Strait.”
Under the Taiwan Relations Act of 1979, the United States is committed to supplying Taiwan with arms to defend itself from a mainland attack. China considers Taiwan to be a breakaway province.
China’s tough language may be aimed at preventing the United States from selling the F-16 fighter planes that Taiwan has been requesting to replace its aging fleet. The Obama administration has not made a decision on the planes. The arms sale is part of a larger package that was approved in 2001 by then-President George W. Bush.
The arms sale comes at a time when China’s relations with Taiwan are better than ever before, with a mainland-friendly government in place in Taipei since 2008.
Taiwanese President Ma Ying-jeou said Saturday that the arms sale would give “Taiwan more confidence and a sense of security to go forward in developing cross-Strait relations.”
Story tags » Boeing

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