China announced sanctions on two of the biggest U.S. defense contractors, Raytheon and Lockheed Martin, on Thursday.
Since China’s Ministry of Commerce’s announcement made on February 16, both Lockheed Martin and the Missiles & Defense segment of Raytheon Technologies are found on the country’s “unreliable entities list,” according to The Wall Street Journal.
These sanctions prevent them from undergoing export or import activities and trade relating to China. They also cannot make new investments, and their senior executives are unable to enter the country, China’s Ministry of Commerce said.
The move follows Washington’s recent decision to blacklist six Chinese companies allegedly linked to an alleged surveillance balloon that was shot down over U.S. airspace last week. Last year the U.S. also moved to restrict the sale of semiconductors to China, as The Dallas Express previously reported.
Beijing’s move is primarily symbolic since, as the WSJ reported, Raytheon and Lockheed Martin are American defense companies, and thus their sales to China had already been subject to restrictions. Raytheon’s civilian aerospace business — not included in the ban — is one of the biggest suppliers of commercial jet engines and aircraft parts to Chinese airlines.
However, China’s Ministry of Commerce cited both companies’ arms sales to Taiwan as the reason for its decision to blacklist them and has demanded that they pay fines to the tune of double the value of those sales within 15 days, the WSJ reported.
Tensions between the U.S. and China in the Asia-Pacific region have been rising for months now, not only over Taiwan but also the Philippines.
Although Taiwan is a self-ruled democracy, China considers the island part of its territory and has not ruled out the use of force to gain control, as President Xi has previously said “reunification must be fulfilled,” according to the BBC.
The U.S. is Taiwan’s biggest arms supplier despite not having formal diplomatic ties with Taipei. Beijing maintains that this harms its national sovereignty, the WSJ reported.
In December, the U.S. State Department gave the green light to three arms packages to Taiwan worth over $425 million. They included parts of C-130 transport aircraft and F-16 fighter jets that Lockheed Martin manufactures, according to the US News & World Report.
The package also included Volcano antitank mine-laying systems made by Northrop Grumman and Oshkosh, who have avoided Chinese sanctions, per the WSJ.
More than $2 billion of arms packages have been sold to Taiwan by the U.S. since 2022, according to the U.S. Defense Security Cooperation Agency. China claims that this sum grows to over $70 billion when arms sales since 1979 are considered, per the WSJ.
