China said it would impose sanctions on Lockheed Martin Corp. after the U.S. approved a possible US$620 million deal for Taiwan to buy parts to refurbish defensive missiles made by the company.
Chinese Foreign Ministry spokesman Zhao Lijian made the announcement at a briefing in Beijing on Tuesday. He called on the U.S. to cut military ties with Taiwan -- which China considers part of its territory -- to avoid “further harm to bilateral relations.”
“China firmly opposes U.S. arms sales to Taiwan,” Zhao said. “We will impose sanctions on the main contractor of this arms sale, Lockheed Martin.”
The U.S. State Department last week approved a potential foreign military deal for the island to buy parts to refurbish previously sold Patriot Advanced Capability-3 (PAC-3) missiles so that they can last 30 years.
It’s unclear how much exposure Lockheed has to China sanctions. U.S. arms manufacturers already face strict limitations on what kind of business they can do with countries deemed by Washington to be strategic rivals, such as China.
However, Sikorsky, which is owned by Lockheed Martin, has a joint venture called Shanghai Sikorsky Aircraft Co. Ltd. that does business with aviation companies and government-backed enterprises. Lockheed Martin generated 9.7 per cent of its revenue in the Asia-Pacific region last year, according to data compiled by Bloomberg, though it’s not broken down by individual countries.
The move comes as tensions grow between the U.S. and China on a number of fronts, from the trade war and territorial claims in the South China Sea to the coronavirus pandemic and new security law Beijing imposed on Hong Kong.
Last week, the U.S. sanctioned a top member of China’s ruling Communist Party and three other officials over alleged abuses in the western province of Xinjiang. Then, on Monday, the Foreign Ministry announced unspecified sanctions against U.S. officials including Senators Marco Rubio of Florida and Ted Cruz of Texas, after the Trump administration levied penalties on Chen Quanguo, who sits on the Communist Party’s 25-member Politburo.
The Trump administration has also gone after Huawei Technologies Co., seeking to bar the Chinese telecommunications giant from advanced 5G wireless trials in countries such as the U.K and India.
China has previously threatened to sanction U.S. companies, including General Dynamics Corp. and Honeywell International Inc., on numerous occasions over arms sales to Taiwan. It has also long-threatened to release a broader “unreliable entities” list in response to various actions by the Trump administration over the past year.
The State Department last week also approved a military sale to Japan of 105 of Lockheed’s F-35 Joint Strike Fighter aircraft and related equipment for an estimated price of US$23.1 billion.
“This proposed sale will support the foreign policy goals and national security objectives of the United States by improving the security of a major ally that is a force for political stability and economic progress in the Asia-Pacific region,” the Defense Security Cooperation Agency said in a statement about the Japan deal Thursday.
--With assistance from Chunying Zhang, Brendan Scott and Karen Leigh.