Singapore Air Show

China vows revenge over Taiwan deal

 - February 1, 2010, 3:28 AM

China has threatened to impose sanctions against the U.S. companies whose equipment forms part of a controversial new arms package for Taiwan that was announced last Friday. They include Boeing and Sikorsky, who enjoy brisk sales
to China of airliners and civilian helicopters, respectively.

The package submitted to the U.S. Congress is worth nearly $6.4 billion and includes Patriot and Harpoon missiles, and BlackHawk helicopters. However, it did not include the additional 60-plus F-16 fighters that Taiwan requested.

The U.S. State Department said the sales would contribute to security and stability between Taiwan and China, but Beijing reacted with fury to the news. The sales would have “a seriously negative impact on many important areas of exchanges and cooperation between the U.S. and China,” said China’s deputy foreign minister. Beijing has reacted badly to previous U.S. arms sales to Taiwan, but relations soon returned to normal. Now, however, China might feel strong enough to follow through with practical countermeasures.

At the Asia-Pacific Security Conference here yesterday, a Chinese security expert told delegates that Beijing’s strong reaction reflected its lack of confidence that the issue of Taiwan’s sovereignty can be resolved to its satisfaction. “The PLA sees American arms sales to Taiwan as a humiliation,” continued Dr. Zhu Feng, deputy director of the Center for International and Security Studies.

Sikorsky is the biggest beneficiary of the proposed package, with the sale of 60
UH-1M BlackHawks worth $3.1 billion. The U.S. helicopter maker has sold a number of S-76s to China, mainly for search-and-rescue and offshore oil industry support missions, and it is involved in a Chinese joint venture called Shanghai Sikorsky. A further China connection, AVIC (Aviation Industry of China) is one of two subcontractors that produce the S-76 fuselage.

The threatened Chinese sanctions potentially could also hit General Electric, which provides the BlackHawk’s engine, if Beijing decides to vent its rage on Boeing and Sikorsky suppliers.

This could have a negative impact on new Chinese civil aircraft programs such as Comac’s C919 airliner, for which GE’s CFM International joint venture has been chosen to provide a version of its new LEAP-X engine.

Lockheed Martin and Raytheon stand to gain $2.8 billion in new business from the proposed sale of 114 more Patriot PAC-3 air defense missiles to Taiwan. Boeing would gain $37 million from the sale of additional Harpoon anti-ship missiles. The package also includes two refurbished mine-hunting ships worth $105 million, and multifunction information distribution systems terminals worth $340 million.
A Boeing spokesman told AIN that the arms package for Taiwan was a government-to-government negotiation in which the company played no direct part. Sikorsky could not be reached for comment.

Taiwan has been lobbying for more F-16s so it can re-equip a third wing with the Fighting Falcon. The U.S. sold 150 F-16A/Bs to the Republic of China Air Force (ROCAF) in the mid-1990s–new aircraft that were equipped to the mid-life upgrade standard. The ROCAF now wants the more capable F-16C/D Block 50 or 60 variant.