BEIJING - China threatened to impose sanctions on U.S. arms firms and cut cooperation with Washington unless it cancels a $6.4 billion arms sale to Taiwan, in an unprecedented move signaling Beijing's growing global power.
China on Saturday bitterly denounced the Obama administration's announcement a day earlier that it planned to sell the package of weapons to Taiwan, a self-ruled island that Beijing views as an illegitimate breakaway province.
The dispute deepens the rifts between Beijing and Washington, also at odds over trade, currency, Tibet and the Internet.
Beijing said it would sanction U.S. companies that sold arms to Taiwan, a break with past practice. China's commercial reprisals have in the past been informal.
The United States will shoulder responsibility for the serious repercussions if it does not immediately reverse the mistaken decision to sell weapons to Taiwan, Chinese Vice Foreign Minister He Yafei told U.S. ambassador to China Jon Huntsman in comments reported on the Foreign Ministry's website (www.mfa.gov.cn).
The dispute threatens to damage broader diplomacy between the two permanent members of the U.N. Security Council. Washington has sought China's backing in pressuring Iran and North Korea and in fighting climate change, and is preparing for a world summit on nuclear weapons in April.
It will be unavoidable that cooperation between China and the United States over important international and regional issues will also be affected, the Chinese Foreign Ministry said, without specifying those issues.
China's Defense Ministry said military exchanges would be put on hold, and Beijing postponed vice ministerial-level talks on security, arms control and non-proliferation.
The military freeze could rule out a visit to China by U.S. Defense Secretary Robert Gates. Military contacts between the two powers are limited, and were last suspended by China in 2008 over U.S. arms sales to Taiwan.
China will certainly make the U.S. pay for its weapon sales to Taiwan more than before, said Jin Canrong, a professor of international relations at Renmin University in Beijing. China might test new weapons to underscore its anger, he added.
The Obama administration told the U.S. Congress on Friday of the proposed sales, which include Black Hawk helicopters, Patriot Advanced Capability-3 anti-missile missiles and two refurbished Osprey-class mine-hunting ships.
The Black Hawk is built by Sikorsky Aircraft, a unit of United Technologies Corp. The Patriot missile is built by Lockheed Martin Corp.
The arms package also includes Telemetry missiles built by McDonnell Douglas, a wholly-owned subsidiary of Boeing Co, the world's second biggest plane maker.
China will also impose corresponding sanctions on U.S. companies that engage in weapons sales to Taiwan, the Foreign Ministry said, without naming any firms.
There have been no signs Beijing will try to use its huge pile of U.S. dollar assets to pressure Washington, or impose broader trade penalties -- both steps that would undercut China's own economic strength.
The world's biggest and third-biggest economies traded angry words about Internet policy after the search engine giant Google Inc earlier this month threatened to shut its Chinese google.cn portal and pull out of China because of censorship and hacking attacks.
In coming months President Barack Obama may meet the Dalai Lama, the exiled Tibetan leader China calls a dangerous separatist. Beijing is sure to condemn such a meeting.
Chinese President Hu Jintao is expected to visit the United States later this year, following a visit to China in November by President Barack Obama that was praised by both sides as showing deepening cooperation.
TAIWAN SAYS ARMS SALES PROMOTE PEACE
Taiwan's President Ma Ying-jeou told reporters the weapons would give Taiwan more confidence and a sense of security to go forward in developing cross-Strait relations.
Under Ma, Taiwan has sought to ease tensions with the mainland and expand economic ties. But it worries China could develop an overwhelming military advantage.
Taiwan has been self-ruled since 1949, when Nationalist forces fled from the mainland to the island to escape victorious Communists. Since then, Beijing has demanded Taiwan accept unification, threatening it could use force.
Washington, under a 1979 act of Congress, is legally obliged to help Taiwan defend itself.
Taiwan says China has 1,000 to 1,500 short-range and mid-range missiles aimed at the island, 160 kilometers (100 miles) from China at its nearest point.
U.S. officials have said Taiwan, which lags China in the balance of military power, needs updated weapons to give it more sway when negotiating with Beijing.
(Additional reporting by Ralph Jennings in Beijing, Paul Eckert in Washington and Kelvin Soh in Taipei; editing by Andrew Roche)