Last Updated 12:23 p.m. ET
China suspended military exchanges with the United States, threatened unprecedented sanctions against American defense companies and warned Saturday that cooperation would suffer after Washington announced $6.4 billion in planned arms sales to Taiwan.
The response to Friday's U.S. announcement, while not entirely unexpected, was swift and indicated that China plans to put up a greater challenge than usual as it deals with the most sensitive topic in U.S.-China relations.
"This is the strongest reaction we've seen so far in recent years," said Stephanie T. Kleine-Ahlbrandt, northeast Asia project director for the International Crisis Group. "China is really looking to see what kind of reaction it's going to receive from Obama on this."
China's Defense Ministry said the arms sales to self-governing Taiwan, which the mainland claims as its own, cause "severe harm" to overall U.S.-China cooperation, the state-run Xinhua News Agency reported. Vice ministerial-level talks on arms control and strategic security were postponed.
The warning comes as the U.S. seeks Beijing's help on issues including the global financial crisis and nuclear standoffs in North Korea and Iran. Tensions were already high after recent U.S. comments on Internet freedom and a dispute between Google and China, as well as President Barack Obama's plan to meet with Tibetan spiritual leader the Dalai Lama this year.
China's Vice Foreign Minister He Yafei told U.S. Ambassador Jon Huntsman that the sales of Black Hawk helicopters, Patriot Advanced Capability-3 missiles and other weapons to Taiwan would "cause consequences that both sides are unwilling to see," a ministry statement said.
The Foreign Ministry also threatened sanctions against U.S. companies involved in the arms sales, which hasn't happened in past sales to Taiwan.
"Our action regarding Taiwan reinforces our commitment to stability in the region," U.S. State Department spokesman P.J. Crowley said Saturday. "We know China has a different view. Given our broad relationship with China, we will manage this issue as we have in the past."
The United States is Taiwan's most important ally and largest arms supplier, and it's bound by law to ensure the island is able to respond to Chinese threats.
China responds angrily to any proposed arms sales, however, and it also cut off military ties with the U.S. in 2008 after the former Bush administration announced a multibillion-dollar arms sale to Taiwan.
A similar cutoff of military ties was expected this time, but it comes as Washington and Beijing wanted to improve normally frosty relations between their armed forces. The U.S. has tried to use military visits to build trust with Beijing and learn more about the aims of its massive military buildup.
"In the past, these kinds of suspensions have lasted for three to six months, with some parts of the military-to-military relationship suspended beyond that," said Phillip Saunders, a distinguished research fellow at the National Defense University in Washington. "I expect something similar this time."
It's not known whether the arms sale will affect President Hu Jintao's expected visit to the U.S. this year or a summit on nuclear safety in the U.S. this spring.
Experts on China warned Beijing could take further steps to punish the United States to show its newfound power and confidence in world affairs.
Jin Canrong, a professor of international studies at China's Renmin University, said the sale would give Beijing a "fair and proper reason" to accelerate weapons testing. China test-fired rockets in recent weeks for an anti-missile defense system in what security experts said was a display of anger at the pending arms sale.
"The U.S. will pay a price for this. Starting now, China will make some substantial retaliation, such as reducing cooperation on the North Korea and Iran nuclear issues and anti-terrorism work," Jin added.
The latest suspension of military ties should affect planned visits to China by U.S. Secretary of Defense Robert Gates and Admiral Michael Mullen, chairman of the U.S. Joint Chiefs of Staff. A visit to the U.S. by the Chinese military's chief of the general staff, Gen. Chen Bingde, could also be called off.
The U.S. Congress has 30 days to comment on the newest arms sales before the plan goes forward. Lawmakers traditionally have supported such sales.
Though Taiwan's ties with China have warmed considerably since Taiwanese President Ma Ying-jeou took office 20 months ago, Beijing has threatened to invade if the island ever formalizes its de facto independence. China has more than 1,000 ballistic missiles aimed at Taiwan.
China often argues that arms sales to Taiwan hurt their relations, but Saunders said that despite the latest announcement and the one in 2008, "cross-Strait relations have never been better."
The arms package announced Friday dodged a thorny issue: The more advanced F-16 fighter jets that Taiwan covets are not included.
The Pentagon's decision not to include the fighters and a design plan for diesel submarines two items Taiwan wants most "shows that the Obama administration is deeply concerned about China's response," said Wang Kao-cheng, a defense expert at Taipei's Tamkang University.
Taiwan's Ma told reporters Saturday that the deal should not anger the mainland because the weapons are defensive, not offensive.