Beijing raises its voice

[CHIMO]

The Chinese response to the decision of the United States to sell a $6.3bn arms package to Taiwan represents a small but significant raising of the ante. The Chinese have partially halted the military exchange programme between the two countries, only recently resumed following a suspension after the last such military package in 2008. This time the Chinese have also threatened to impose sanctions against the US firms involved in the deal. This is causing serious disquiet among firms like Boeing and Lockheed Martin.

Taiwan, of course, is of special significance to the Chinese; since 1949 the return of the island to China has been seen as an overriding priority. Beijing regards Taiwan as an internal Chinese issue, and the US arms sales are ­therefore regarded as interference in China's internal affairs and a violation of its sovereignty. When the pro-independence DPP held office in Taiwan, China's relations with the island were fraught; but with the victory of the more ­moderate KMT, they have improved immeasurably and some kind of ­reconciliation between China and ­Taiwan is now conceivable. This has made the Chinese more confident in their handling of the Taiwan issue.

But the underlying reason for the tougher Chinese response is the shift in the balance of power between China and the US, evident since the global financial crisis. Beijing is in a stronger position, and this is finding expression in its ­attitude towards issues from climate change to a growing economic assertiveness. It is unlikely the Chinese will overplay their hand – they are too cautious and too diplomatically shrewd – but we should expect them to be more prepared to flex their muscles.

Their reaction to the US arms package provides a subtle insight into this. The issue is decades-old – the US has been supplying arms to Taiwan ever since it declared independence from China. The Chinese have angrily protested at each and every sale, albeit always aware there was little they could do to affect them. But a rapid and palpable shift is taking place. The US is feeling vulnerable, conscious for the first time that its power is on the wane, and painfully aware that China is now both its creditor and a nation on the rise. The Chinese threat of sanctions against the companies involved in the deal is making aerospace executives nervous: it is estimated that China will order 3,770 aircraft between now and 2028, the government centrally manages purchases, and Boeing in particular fears that it could seriously lose out to Airbus.
http://www.guardian.co.uk/commentisfree/cifamerica/2010/jan/31/china-taiwan-united-states-arms