China Threatens Retaliation Over U.S. Arms Sale to Taiwan

(Bloomberg) -- China vowed retaliation against a proposed $8 billion U.S. sale of advanced fighter jets to Taiwan, threatening to impose sanctions on American firms participating in such a deal.

“China will take all necessary measures to defend its own interests, including imposing sanctions on the U.S. companies involved in the arm sales,” Chinese Foreign Ministry spokesman Geng Shuang said at a Wednesday briefing in Beijing. “They constitute severe interference in China’s internal affairs and undermine China’s sovereignty and security interests.”

The 66 advanced Lockheed Martin Corp. F-16 jets, approved by the Trump administration, represents a boost for the island’s military -- and an even bigger boon for President Tsai Ing-wen as she faces a stiff campaign for re-election. It marks a major advance for the island’s aging air defense capabilities, even if a base model of the fighter plane has been in its skies for almost half a century.

The U.S. State Department formally notified Congress this week that it supports a potential sale of the jets. China, which considers democratically-run Taiwan part of its territory, has long considered such arms sales to the island as a violation of its agreements with the U.S.

The U.S. committed to providing Taiwan with the means to defend itself when it switched diplomatic ties from Taipei to Beijing in 1979. Beijing had warned against the move even before the Trump administration formalized it.

Beijing’s military is much larger and more advanced, with a missile arsenal that could likely wipe out the island’s air strips in the event of any conflict across the Taiwan Strait. That makes the deal more of a political coup for Tsai than any significant change to the military balance between Beijing and Taipei.

“Regardless of whether it can actually use U.S. arms in combat, Taiwan has always appreciated any U.S. arms sale, and especially the big ticket items such as F-16s, to symbolize Washington’s continued security commitment to the island,” said Derek Grossman, a senior defense analyst with Rand Corp. “Taiwan’s political calculation in the sale is purely to signal to Beijing that the U.S. will defend the island if China decides to attack.”

While the U.S. declined to sell Taipei more advanced F-35 jets owned by both Japan and South Korea, the F-16V variant on offer is still a significant improvement over Taiwan’s fleet. Though the planes were designed in the 1970s, Taiwan has been seeking newer U.S. aircraft for more than a decade, and this would be the first such deal for American fighters since 1992.

China Pushes Back

Taiwanese presidential spokesman Ernesto Ting said Wednesday that Taipei will allocate a special budget to purchase the jets. He stressed the deal’s symbolism.

“The decision by the U.S. government is a significant gesture for security in the Taiwan Strait and regional stability and peace,” Ting said. The F-16 deal “helps uphold the welfare and freedom of the Taiwanese people.”

Although China has threatened to sanction companies participating in the deal, few U.S. defense contractors have significant business interests in China. China also threatened to stop doing business with U.S. companies involved in a different proposed U.S. weapons deal last month, but no sanctions or boycotts have been announced so far.

The U.S. has generally tried to play down the technological capabilities of the weapons it sells Taipei. It wouldn’t need to be as secretive this time around as Beijing is confident in its more advanced technology and news of a potential sale has been circulating for some time, said Wu Shang-Su, a research fellow at Singapore’s S. Rajaratnam School of International Studies.

“Due to China’s superiority, the U.S. would not need to downplay the capability as it did in the past,” he said, adding that the level of backlash from Beijing depended largely on whether the U.S. decides to include offensive weapons that could potentially be used to attack China, rather than simply defend the island.

--With assistance from Miao Han and Debby Wu.

To contact Bloomberg News staff for this story: Iain Marlow in Hong Kong at imarlow1@bloomberg.net;Lucille Liu in Beijing at xliu621@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Karen Leigh, James Mayger

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With assistance from Bloomberg