Lockheed Martin Corporation (NYSE: LMT) and Raytheon Technologies Corporation (NYSE: RTX) both have experienced a major blow in China as Beijing has imposed sanctions on both companies. The reasons for imposing sanctions on two US companies are the U.S. arms sales to Taiwan.
The foreign ministry spokesman Wang Wenbin has confirmed that the sanctions are retaliation for a $100 million arms deal on February 7. Beijing believed that the arms sales has harmed China's security interests. Moreover, it has significantly jeopardized China-US relations and stability and peace in the Taiwan Strait.
Wang disclosed that following the relevant requirements in China's anti-foreign sanctions law, the Chinese government has decided to take actions against Raytheon Technologies and Lockheed Martin for their illegal act. Previously, on at least two different occasions China has imposed sanctions on Lockheed and Raytheon, in 2019 and 2020. Beijing has not provided any information regarding the sanctions on the two US companies earlier.
Furthermore, Beijing believed that the self-ruled island of Taiwan is an autonomous province that must be reunited with the mainland. China frequently said on different occasions that Taiwan is the most important and sensitive issue in its relationship with Washington, which is also stressed over trade and human rights disputes.
Moreover, the United States does not sell weapons to China. However, the United States is required by the Taiwan Relations Act of 1979 to give Taiwan the ability to defend itself, and US arms sales inevitably enrage China. China has over the past two years increased its military and diplomatic pressure against Taiwan, whose government claimed that it wants peace but would protect the island if under attack.