China Sanctions 5 US Defense Firms In Strong ‘Message’ Ahead Of Taiwan Election

In a major move by Beijing which appears timed to send a strong message just ahead of Taiwan’s presidential and parliamentary elections on January 13, China has unveiled sanctions against five American defense firms.

The targeted companies are involved in recent and ongoing US arms deals and sales to the self-ruled island of Taiwan. They’ve been named in Chinese state media as BAE Systems Land and Armament, Alliant Techsystems Operation, AeroVironment, ViaSat and Data Link Solutions.

A Sunday statement from the Chinese Foreign Ministry said the sanctions are “In response to these gravely wrong actions taken by the US.” It said recent arms sales “seriously harm China’s sovereignty and security interests, undermine the peace and stability across the Taiwan Strait.”

China has of late ramped up its anti-independence messaging, with Chinese President Xi Jinping in his annual New Year’s Eve address stressing that Taiwan would “surely be reunified” with the mainland.

The US State Department just last month approved the latest US-Taiwan deal, a $300 million sale of military equipment for Taiwan’s defense information technology sector.

But these new sanctions are being widely seen as mostly symbolic, given these major defense firms don’t typically do business in China to begin with.

“The sanctions will freeze any property the companies have in China and prohibit organizations and individuals in China from doing business with them,” the Foreign Ministry specified in an online statement.

Beijing is also sending strong signals to the United Kingdom as well with the following surprise, and very bold move:

China has detained the head of an overseas consulting firm for allegedly spying on the Asian nation for the British government, putting renewed focus on an industry targeted by Beijing’s national security crackdown.

China’s spy agency said Monday that the U.K.’s MI6 intelligence service employed the consultant from a “third country” to carry out espionage activities. The alleged spy, surnamed Huang, provided the U.K. with state secrets and intelligence, according to the Ministry of State Security’s [MSS] official WeChat account.

The MSS alleges the man “entered China several times under instructions to use their public profile as a cover to collect China-related intelligence for Britain… and seek other personnel whom MI6 could turn.” China is also claiming to have evidence of Huang’s spy activities.

The MI6 building in London, via Reuters

This is but the latest in the long-running tit-for-tat wherein business dealings between the West and China threaten to be severely eroded, also given deepening mistrust, as each side alleges their business executives are targeted by hostile foreign security services.

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Below is a Taiwan election review and what’s at stake and what to watch, based on Foreign Policy’s 5 Predictions for China in 2024, [emphasis ZH]…

“Taiwan holds a presidential election on Jan. 13, and the year could start with a small crisis in the straits. Current Taiwanese Vice President Lai Ching-te, who serves under President Tsai Ing-wen and is a member of the Democratic Progressive Party (DPP), holds a narrow lead in the polls. His election would ire Beijing; he is an advocate for a more independent Taiwan and strongly opposed to the Chinese Communist Party (CCP).

Although Lai has said he won’t call for formal Taiwanese independence or drop the Republic of China name—a red line for Beijing—he has also said that Taiwan’s sovereignty is “a fact” and reminded his fellow candidates that by Beijing’s standards, they are all pro-independence.

A Lai victory would likely prompt aggressive moves from Beijing, including naval maneuvers and airspace intrusions. Reports last week about comments made by Xi  to U.S. President Joe Biden about reunification with Taiwan when they met in November stirred some panic in Washington, but an invasion remains highly unlikely. It would be risky and difficult, especially when China is struggling with other crises.

Even a victory for Taiwan’s opposition Kuomintang (KMT) on Jan. 13 may cause some problems. The KMT is more pro-China than the DPP, but it would hardly hand the keys to the island over to Beijing. Chinese officials might overestimate the significance of a KMT election win, seeing it as a sign of China’s influence in Taiwan. Although 17 percent of Taiwanese voters said in a recent survey that China is their main concern, more than twice that number picked the economy.”