China Sanctions US Defence Companies Days After Vowing to Retaliate Against US Over Spy Balloon Row

China has imposed sanctions against two American defence manufacturers over arms sales to Taiwan in latest embargo against US companies.

The sanctions against Lockheed Martin Corp and Raytheon Technologies Corp come after China pledged to take countermeasures against US in response to its handling of a suspected surveillance balloon that entered American airspace and was shot down on February 4.

Lockheed makes the F-22 Raptor fighter, the model which was used for shooting down the Chinese spy balloon. Raytheon makes the AIM-9X Sidewinder missile, which was used in the mission.

China’s commerce ministry put Lockheed Martin Corp and Raytheon Technologies Corp onto an “unreliable entities list”.

Lockheed Martin and Raytheon Missile and Defense Corporation, a subsidiary of Raytheon Technologies, are prohibited from “engaging in import and export activities related to China”, the commerce ministry said in a statement.

Beijing also banned the firms from further investment in China, barred senior management from entering the country, cancelled residence permits for any staff in China and imposed fines that are double the contracted amounts of their arms sales to Taiwan.

It is not clear how China would enforce such fines, which it said must be paid within 15 days.

The sanctions come days after the US Commerce Department restricted six Chinese companies tied to the country’s army aerospace program from obtaining US technology.

Last February, China sanctioned the two firms over a $100 million arms sale to Taiwan, a self-ruled island which Beijing views as a breakaway province.

On at least two previous occasions China has announced sanctions against Lockheed and Raytheon, in 2019 and 2020, though Beijing has not explained what those sanctions entailed or how they were enforced.

The United States does not sell weapons to China. However, the United States is bound by the 1979 Taiwan Relations Act to provide Taiwan with the means to defend itself, and U.S. weapons sales always attract China’s anger.

Political tension has risen between the United States and China over the balloon, which Beijing maintains was a civilian research aircraft blown off course.

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