The United States' announcement Wednesday that it will sell U.S.$1.83 billion of arms to Taiwan has prompted an immediate protest and threat of sanctions from Beijing, which sees the island as a breakaway province awaiting reunification.
Washington has said the deal, the first in more than four years, is based solely on Taiwan’s defense needs.
Taiwan has been governed separately from mainland China throughout the Japanese occupation (1895-1945) and since the KMT nationalist regime fled to the island in 1949.
Many of the democratic island's 23 million residents identify as Taiwanese rather than Chinese, and there is broad political support for de facto self-rule, as well as concern over Beijing's ongoing threat to use military force, should Taiwan seek formal statehood.
If the sale goes through, Beijing officials say they will retaliate with economic sanctions following a formal diplomatic protest.
"China resolutely opposes the sale of weapons to Taiwan by the U.S.," vice foreign minister Zheng Zeguang was quoted as saying in a meeting with a U.S. diplomat in Beijing.
"In order to safeguard the nation’s interests, the Chinese side has decided to take necessary measures, including the imposition of sanctions against companies participating in the arms sale to Taiwan," Zheng said in comments quoted on his ministry's official website.
The proposed arms deal includes two decommissioned U.S. Navy frigates, anti-tank missiles, amphibious assault vehicles, and Stinger surface-to-air missiles, according to the Associated Press.
Also included are equipment to support intelligence collection, surveillance, and reconnaissance and a weapons system to defend against anti-ship missiles, it said.
A chilling effect
While the threat of sanctions may do little to deter the U.S. and EU defense industries, which are both barred from selling to China, it could herald a new era of assertive sanctions from Beijing with repercussions for many of its economic partners in the Asia Pacific region, analysts said.
"Everyone knows that the main beneficiaries of this sale, Raytheon and Lockheed Martin, don't do much business with mainland China, so for the Chinese government to instigate sanctions against them isn't going to affect their bottom line much," Taiwan military affairs commentator Zheng Shaoru told RFA.
"But I think that if they expand such a policy in future, it will probably have a chilling effect ... on other countries who might want to sell weapons or security equipment to Taiwan," Zheng said.
"For example, would Japan transfer technology or sell submarines to Taiwan, which has been in the market for them for several years now?" he asked, adding that many Japanese manufacturers of military and security equipment are private concerns that lack state backing.
"Doing so is bound to incur considerable economic losses for them, especially given the depth and breadth of economic ties between China and Japan," he said.
Just getting started
Wu Fei, a senior researcher at the Charhar Institute diplomatic think-tank, said that the threat of sanctions heralds a new era of assertive foreign policy, and that its impact will be felt most keenly by China's neighbors.
"What we are seeing now is the first phase in a geopolitical game between China and the United States," Wu said.
"The question of cross-straits relations has always been a core issue for Beijing, and the United States has continued to challenge China on its core policies," he said.
"Actually, China has long used its regional muscle and power to impose sanctions on the sale of arms to Taiwan [within the region]."
He said Beijing could also use economic sanctions to advance its claims in disputed maritime territories in the South and East China Seas.
"I think they have only just got started with their sanctions," Wu said.
Reported by Yang Fan for RFA's Mandarin Service. Translated and written in English by Luisetta Mudie.