U.S. defense contractors Lockheed Martin and Raytheon have been fined for their continued arms sales to Taiwan, it imposed on Lockheed Martin and Raytheon earlier this year.
The People's Republic of China regards Taiwan, a self-governing democracy, as a rogue province and has vowed to reunite it with the mainland by force if necessary, a task that would be easier if it were able to convince American arms manufacturers and policymakers to cut off weapons sales to Taiwan.
China's commerce ministry announced Tuesday that the sanctions would include a ban on exports and imports from and to China as a means to prevent Chinese products from being used in their military operations. The agency added that Chinese firms should strengthen their due diligence and compliance system construction to verify transaction information and should not conduct knowingly conduct business with the two companies if it occurs in the form of importing, exporting, or transporting products.
Taiwan sources a significant portion of its military equipment from the U.S. and against lockheed Martin and Raytheon Missile and Defense Corporation, a subsidiary of Raytheon, in February after the latest announcements of arms sales to Taiwan. It marked the fourth time China has sanctioned the two firms, although Reuters said that in the three previous cases, Beijing didn't provide details about the restrictions and their enforcement.
Taiwan has been relying on Lockheed Martin to supply Taiwan with F- 16 fighter jets, radars, and air defense missiles in addition to other equipment.
Taiwan has been supported by Raytheon, which provides missiles, radars and other defense items.
The two companies have also formed a joint venture to produce Javelin anti-tank missiles, which Taiwan has acquired.
Both Lockheed Martin and Raytheon were already prohibited from selling military equipment to China, but the sanctions could impact any civil business the firms do in China. In China, Lockheed Martin has sold air traffic control equipment for commercial use for civilian airports and helicopters.
It's not clear what impact those firms could have on those companies obtaining exports from China. China's role as a leading global exporter of rare earth minerals may pose a challenge, although the level of exposure to China and the two defense contractors supply chains for those materials is unknown.
China's sanctions against Lockheed Martin and Raytheon will also require a number of senior executives from traveling to China or working there.
The list ofacked executives comprises Lockheed Martin CEO James Taiclet, COO Frank St. John, and CFO Jesus Malave, as well as Raytheon Missiles and Defense President Wesley Kremer and Vice Presidents Agnes Soeder and Chander Nijhon.