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"We Tibetans are looking for a legitimate and meaningful autonomy, an arrangement that would enable Tibetans to live within the framework of the People’s Republic of China."

U.S. regrets China's response to arms sales

February 3, 2010

By Jim Wolf and Ben Blanchard
January 31, 2010

WASHINGTON/BEIJING, Jan 30 -- The United States
said on Saturday it regretted China's announced
cuts in bilateral contacts and its plans to
punish U.S. companies involved in a $6.4 billon arms package for Taiwan.

While China said the arms sales "damaged" its
national security and reunification efforts with
Taiwan, the Obama administration defended the
package sent to the U.S. Congress on Friday as boosting regional security.

"We regret that the Chinese government has
announced that it plans to curtail
military-to-military and other security-related
exchanges and take action against U.S. firms that
supply defensive articles to Taiwan," said P.J.
Crowley, the State Department's chief spokesman.

"We believe our policy contributes to stability
and security in the region," he said.

China opposes all U.S. arms sales to Taiwan,
which it regards as part of its territory. For
the first time, it said would impose unspecified
sanctions on unnamed companies involved in arms
sales to Taiwan and scale down contacts with the
United States unless it canceled the new arms package.

China's Foreign Minister Yang Jiechi said the
United States had "damaged China's national
security and great task of reunification (with
Taiwan)," the official Xinhua news agency reported early on Sunday.

Yang, traveling in Cyprus, said China and the
U.S. had held many discussions about the arms
sales, but the U.S. had ignored China's demand that the sales be stopped.

The United States should "truly respect China's
core interests and major concerns, and
immediately rescind the mistaken decision to sell
arms to Taiwan, and stop selling arms to Taiwan
in order to avoid damaging broader China-U.S. relations," Yang said.

Among the sales, subject to congressional review,
would be Black Hawk utility helicopters built by
Sikorsky Aircraft, a unit of United Technologies
Corp. (UTX.N); Lockheed Martin Corp (LMT.N)-built
and Raytheon Co. (RTN.N)-integrated Patriot
missile defenses; and Harpoon land- and
sea-attack missiles built by Boeing Co. (BA.N). See factbox [ID:nN30152939]

Representatives of Sikorsky, Raytheon and Boeing
either had no immediate comment or did not
respond to questions left for them. A Lockheed
spokesman referred a caller to the Defense
Security Cooperation Agency, which formally
announced the sales plans. An agency
representative could not immediately be reached.

Boeing, the No. 1 U.S. exporter, has big
commercial interests in China, the world's most
populous market, including commercial aircraft
sales. United Technologies also has significant
sales in China, where it sells Carrier brand
heating and air-conditioning, Otis elevators and escalators and other products.

The other arms makers appear to have more limited
exposure to Chinese sanctions.


The dispute deepens rifts between the world's
biggest and third-biggest economies. Although
they are cooperating on counter-terrorism,
nuclear arms control, climate change and other
major security issues, Beijing and Washington are
at odds over trade as well as China's tight
control of its currency, dissent in Tibet and the Internet.

Since 1949 when Nationalist forces fled to Taiwan
after losing the mainland to Communist rebels,
Beijing has demanded Taiwan accept unification,
threatening to use force if necessary.

"The United States will shoulder responsibility
for the serious repercussions if it does not
immediately reverse the mistaken decision to sell
weapons to Taiwan," Chinese Vice Foreign Minister
He Yafei told U.S. ambassador to China Jon
Huntsman in comments reported on the ministry's website (

China's Defense Ministry said military exchanges
would be put on hold and Beijing postponed vice
ministerial-level talks on security, arms control and non-proliferation.

"China will also impose corresponding sanctions
on U.S. companies that engage in weapons sales to
Taiwan," the Foreign Ministry said, without
naming any companies. A spokesman for the Chinese
embassy in Washington did not immediately respond to a request for comment.

But Beijing has shown no sign of trying to use
its huge pile of U.S. dollar assets to pressure
Washington, or impose broader trade penalties --
both steps that would undercut China's own economic strength.


The feud could damage broader diplomacy between
the two permanent members of the U.N. Security
Council. Washington has sought China's backing in
its nuclear standoffs with Iran and North Korea
and in fighting climate change, and is preparing
for a world summit on nuclear weapons in April.

China's official Xinhua news agency said in an
English-language commentary that the arms sales
"will cause seriously negative effects on
China-U.S. exchanges and cooperation in important
areas, and ultimately will lead to consequences
that neither side wishes to see."

The sales in effect constitute the second half of
a package that former President George W. Bush
had approved as early as 2001. The notice of a
potential sale is required by law and does not
mean a deal has been concluded. Congress has 30
days to block such sales, though it has never done so.

Taiwan's President Ma Ying-jeou told reporters
the weapons would give "Taiwan more confidence
and a sense of security to go forward in developing cross-Strait relations".

Under Ma, Taiwan has sought to ease tensions with
the mainland and expand economic ties. But it
worries China could develop an overwhelming military advantage.

Taiwan says China has 1,000 to 1,500 short-range
and mid-range missiles aimed at the island.

U.S. officials have said Taiwan, which lags China
in the balance of military power, needs updated
weapons to give it more sway when negotiating with Beijing.

In coming months, President Barack Obama may meet
the Dalai Lama, the exiled Tibetan leader whom
China calls a dangerous separatist. Beijing is sure to condemn such a meeting.

Chinese President Hu Jintao is expected to visit
the United States later this year. Both sides
praised an Obama visit to China in November as showing deepening cooperation.

The two countries traded angry words about
Internet policy after the search engine giant
Google Inc. (GOOG.O) this month threatened to
shut its Chinese portal and pull out of
China because of censorship and hacking attacks.

(Additional reporting by Ralph Jennings in
Beijing; Kelvin Soh in Taipei; Paul Eckert, Adam
Entous and Arshad Mohammed in Washington; editing
by Andrew Roche, Paul Simao and Anthony Boadle)
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