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China angered by U.S. plan to sell weapons to Taiwan

WASHINGTON — China curtailed military exchanges with the United States on Saturday and threatened to sanction U.S. firms in retaliation for proposed weapon sales to Taiwan.

The moves signaled a souring of relations between the world's two largest economies.

China's actions, reported by its state-run news agency, came a day after President Barack Obama told Congress he would sell Taiwan $6.4 billion in helicopters, missile defense rockets, mine-hunting ships and other materiel.

China also suspended military-to-military contacts with the Pentagon the last time Washington sold weapons to Taiwan — which Beijing regards as a renegade province — in 2008. But the threat to limit dealings with U.S. companies that sell weapons to Taiwan was new and suggests China is willing to use its growing economic power as a diplomatic tool.

"The U.S. plan will definitely further undermine China-U.S. relations and bring about serious negative impact on exchanges and cooperation in major areas between the two countries," Chinese Vice Foreign Minister He Yafei said, according to the Xinhua news agency.

Xinhua said He called in U.S. Ambassador to China Jon Huntsman on Saturday to protest the weapons sale.

In Washington, the State Department defended the sale, saying the U.S. is obligated to provide the island defensive weapons under the 1979 Taiwan Relations Act.

Congress has 30 days to block the sale, but appears unlikely to do that. Indeed, some lawmakers want the administration to sell Taiwan even more advanced weapons, including F-16 fighter jets.

Since taking office, Obama has tried to keep relations with China on a solid footing. He visited China in November.

Disputes have flared on a number of touchy issues, however, including trade, climate change and a threat by Internet giant Google to leave the Chinese market to protest computer hacking of its members' accounts.

Still, both the United States and China have good reasons not to let relations spin out of control. The United States is a huge market for Chinese goods, which helps fuel its economic growth, while China's government holds nearly $800 billion in U.S. debt, according to Treasury Department figures.

Senior U.S. officials predicted that once the initial storm blows over, the two countries will continue cooperation on a range of issues.

China angered by U.S. plan to sell weapons to Taiwan 01/30/10 [Last modified: Saturday, January 30, 2010 10:30pm]
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