BEIJING – China threatened to impose sanctions on US arms firms and cut co-operation with Washington unless it cancels a $6.4 billion arms sale to Taiwan, in an unprecedented move signaling Beijing's growing global power. China on Saturday bitterly denounced the US President Barack Obama administration's announcement a day earlier that it wanted to sell the package of weapons to Taiwan, the self-ruled island that Beijing views as an illegitimate breakaway state. The dispute deepens the rifts between Beijing and Washington, already at odds over trade, currency, Tibet and the Internet. Beijing said it would formally sanction US companies that sold arms to Taiwan, a break with past practice. Previously, China's commercial reprisals have been informal. "The US 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 US ambassador to China Jon Huntsman in comments reported on the Foreign Ministry's website. The dispute threatens to spill over into broader international diplomacy. Washington has sought China's backing in pressuring Iran and North Korea, and is also preparing for a world summit on nuclear weapons in April. "It will be unavoidable that co-operation between China and the US over important international and regional issues will also be affected," the Chinese Foreign Ministry said, without specifying any of those issues. China's Defence Ministry said military exchanges would be put on hold, and Beijing postponed vice ministerial-level talks on strategic security, arms control and non-proliferation. "I think the price the United States pays will be heavier than the US may have anticipated," said Liu Jiangyong, professor of international security at Beijing's Tsinghua University. "The US view that arms sales to Taiwan are just a momentary squall could be out-of-date," he said. "Now longer-term cooperation could also be damaged." The Obama administration told the US Congress on Friday of the proposed sales, which include Black Hawk helicopters, Patriot "Advanced Capability-3" anti-missile missiles and two refurbished Osprey-class mine-hunting ships. The Black Hawk, a tactical transport helicopter, is built by Sikorsky Aircraft, a unit of United Technologies Corp. The Patriot missile is built by Lockheed Martin Corp, and Raytheon Co is the system integrator. "China will also impose corresponding sanctions on US companies that engage in weapons sales to Taiwan," the Foreign Ministry said, without naming any firms. There have been no signs Beijing will try to use its huge pile of US dollar assets to pressure Washington, or impose broader trade penalties – both steps that would undercut China's own economic strength. The world's biggest and third-biggest economies traded angry words about Internet policy after the search engine giant Google Inc earlier this month threatened to shut its Chinese google.cn portal and pull out of China because of censorship and hacking attacks. In coming months President Barack Obama may meet the Dalai Lama, the exiled Tibetan leader China calls a dangerous separatist. Beijing is likely to condemn such a meeting. Chinese President Hu Jintao is expected to visit the United States later this year. Taiwan's Defence Ministry welcomed Washington's decision. "Its sales of arms to Taiwan gives us greater confidence in pushing for an amicable outcome in our relations with China, and will help promote peace in the Taiwan Strait."
