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China on Wednesday said it had sanctioned 12 companies because of their connections to the U.S. defense industry and 10 of their senior executives. The action was in response to U.S. arms sales to Taiwan and to retaliate against U.S. sanctions on Chinese companies that do business with Russia.
The companies include units of Lockheed Martin (NYSE:LMT), RTX (NYSE:RTX) and General Dynamics (NYSE:GD). Executives of Northrop Grumman (NYSE:NOC) and General Dynamics (GD) also were named.
Chinese sanctions on U.S. defense companies aren’t unusual amid the geopolitical tensions between the two countries. Last year, the country barred Lockheed Martin (LMT) and RTX’s (RTX) Raytheon Missiles and Defense unit from importing goods and making new investments in China.
The most recent measures came after the United States “indiscriminately imposed illegal unilateral sanctions on a number of Chinese entities on the grounds of so-called Russian-related factors” and that the U.S. “continued to sell arms to China’s Taiwan region,” according to China’s Ministry of Foreign Affairs.
After Taiwan this week inaugurated Lai Ching-te as its new president, China ordered sanctions on Boeing Defense, Space and Security (NYSE:BA) and two other U.S. defense companies in relation to weapons sales to Taiwan. China also sanctioned Mike Gallagher, a former Republican congressman from Wisconsin who has supported Taiwan.
China considers Taiwan as a breakaway territory. The United States doesn’t recognize Taiwan as a country, but is required by federal law to assist the island with its defense.