On July 12th, the Chinese Ministry of Foreign Affairs once again announced sanctions on six American defense companies and five senior executives, citing the sale of weapons to Taiwan as the reason. Experts believe that the symbolic significance of these so-called sanctions outweighs their actual impact. The long-standing policy of the United States to sell arms to Taiwan will continue despite China’s “sanctions,” which will only accelerate the decoupling between the US and China, prompting the US to provide even greater support to Taiwan.
The Chinese Ministry of Foreign Affairs announced on its website that the US recently announced another arms sale to Taiwan, which they claim “seriously violates the One China Principle and the three Sino-US Joint Communiques.” Consequently, sanctions have been imposed on six American defense companies and five senior executives effective immediately.
The six American defense companies targeted are Anduril Industries, Maritime Tactical Systems, Indo-Pacific Defense, AEVEX Aerospace, LKD Aerospace, and Peak Technology. The sanctioned senior executives include Wahid Nawabi, Chairman, CEO, and President of AeroVironment, Kevin McConnaughy, Senior Vice President and Chief Financial Officer of AeroVironment, Brian Schimpf, CEO of Anduril Industries, Matthew Grimm, COO of Anduril Industries, and Gregory Cosner, Senior Vice President of Global Defense at Anduril Industries.
The sanctions include freezing assets and properties within China, prohibiting transactions and collaborations with the individuals and organizations, and banning their entry into China (including Hong Kong and Macau).
On the same day, the US State Department issued a statement imposing visa restrictions on Chinese officials involved in religious and human rights oppression, as a response to Beijing’s sanctioning of American companies. The sanctions target Chinese officials involved in acts of “genocide in Xinjiang, the undermining of basic freedoms in Hong Kong, and human rights abuses in Tibet.”
Regarding the Chinese sanctions, several experts from Taiwan’s Defense Ministry think tanks believe that they have little significance in the existing US-China confrontation. The majority of America’s defense industry assets in China are limited, therefore, the symbolic significance of these so-called sanctions holds more weight than their actual effects.
Dr. Zhong Zidong from the research institute commented that China’s main hope is to deter American defense companies because, ultimately, the US is a democratic country with a certain level of freedom and influence in the defense industry. However, the deterrent effect of these sanctions is very limited.
These types of “sanctions” by China are not new. On May 22nd, they announced sanctions on 12 American defense companies and 10 senior executives. Despite repeated sanctions, companies like Lockheed Martin have not been deterred from selling weapons to Taiwan.
Last month, nearly 30 American arms dealers met with relevant authorities in Taiwan. The Taiwan-US Defense Industry Forum was held in Taipei on June 6 in a closed-door meeting. Representatives from 27 American defense contractors, including Lockheed Martin, Raytheon, and BAE Systems, attended the meeting. Former Commander of the US Navy’s Pacific Marine Corps, Steven Rudder, also attended the opening ceremony.
Retired Major General Yu Zongji, former Dean of the School of Political Warfare at Taiwan’s National Defense University, noted that American defense companies have limited business dealings with China due to stringent US military technology controls.
“In essence, it emphasizes freezing the assets of these individuals and the related top-level personnel in the mainland, but the effect is not significant,” as most US defense executives have likely taken precautions.
Additionally, China’s use of such sanctions is primarily for domestic propaganda purposes as it does not achieve significant practical results internationally. Selling arms to Taiwan is not solely a personal or corporate decision but falls within the US’s arms sales process and national policy guidelines.
Yu Zongji believes that these sanctions essentially imply an irreparable deterioration in Sino-US relations. “The relations between the two sides have deteriorated to a point where there is no chance of turning back, so both sides are resorting to retaliatory measures.”
Furthermore, the impact of these sanctions on Taiwan is expected to be minimal, with Taiwan continuing to seek various arms procurements and potentially seeking cooperation with sanctioned American defense companies.
China has escalated its harassment in the Taiwan Strait, South China Sea, and East China Sea in recent years. In addition to conducting military drills around Taiwan with aircraft and ships, this month, the Chinese Coast Guard forcibly detained a Taiwanese fishing boat, drawing close attention from the US and its allies, with China intensifying preparations for an attack on Taiwan.
The US has issued multiple warnings to China. President Biden, in an interview with TIME magazine at the end of May, reiterated that the US is committed to defending Taiwan if China attempts to unilaterally alter the status quo.
Biden stressed that while the US does not seek Taiwanese independence, it will defend Taiwan if China tries to change the status quo. This has reinforced US commitments to Taiwan’s security in the face of growing Chinese aggression.
Finally, the Chinese sanctions are unlikely to deter the US government but may instead provoke a more determined response, leading to increased defense support for Taiwan and bolder decisions by the US. The confrontation between the US and China is likely to strengthen security cooperation between the US, Taiwan, and Japan amidst the escalating tensions in the region.