BBC World Service
February 1, 2010
By Rob Young

China has threatened to sanction firms involved in a US-approved $6.4bn (£4bn) weapons deal with Taiwan.  That would include US aerospace giant Boeing, which dominates China’s airline market ahead of main rival Airbus.

Boeing subsidiary McDonnell Douglas is delivering missiles worth $37m to Taiwan, the US government has said.
By comparison, one Boeing commercial airliner costs $50m or more. Boeing said it has not had any notice of  sanctions and declined to comment.

If there is an embargo, it would hit Boeing very, very badly  Tom Ballantyne, chief correspondent for Orient Aviation Magazine.

“This is a government-to-government issue,” Boeing China said in a statement.  “We are not in the position to comment or speculate on this matter.”

Professor Wu Xinbo, at the Center for American Studies at Shanghai’s Fudan University, said “this is the first time the government has issued such an announcement, and I think they are very serious”.

Tom Ballantyne, chief correspondent for Orient Aviation Magazine said “it could be horrifying news for Boeing”.   “If there is an embargo, it would hit Boeing very, very badly,” he said.

Monday’s edition of the state-run China Daily newspaper quoted Ye Hailin, an expert at the Chinese Academy of Social Sciences.  He said companies profiting from defence deals with Taiwan would need to pay a price.  “You cannot just make money from both Taiwan and the mainland,” said Mr Ye.

China claims sovereignty over Taiwan.     more …