U.S. regrets China's response to arms sales

By Jim Wolf and Ben Blanchard

WASHINGTON/BEIJING (Reuters) - The United States said on Saturday it regretted China's announced cuts in bilateral contacts and its plans to punish U.S. companies involved in a $6.4 billon (4 billion pound) arms package for Taiwan.

While China said the arms sales "damaged" its national security and reunification efforts with Taiwan, the Obama administration defended the package sent to the U.S. Congress on Friday as boosting regional security.

"We regret that the Chinese government has announced that it plans to curtail military-to-military and other security-related exchanges and take action against U.S. firms that supply defensive articles to Taiwan," said P.J. Crowley, the State Department's chief spokesman.

"We believe our policy contributes to stability and security in the region," he said.

China opposes all U.S. arms sales to Taiwan, which it regards as part of its territory. For the first time, it said would impose unspecified sanctions on unnamed companies involved in arms sales to Taiwan and scale down contacts with the United States unless it cancelled the new arms package.

China's Foreign Minister Yang Jiechi said the United States had "damaged China's national security and great task of reunification (with Taiwan)," the official Xinhua news agency reported early on Sunday.

Yang, travelling in Cyprus, said China and the U.S. had held many discussions about the arms sales, but the U.S. had ignored China's demand that the sales be stopped.

The United States should "truly respect China's core interests and major concerns, and immediately rescind the mistaken decision to sell arms to Taiwan, and stop selling arms to Taiwan in order to avoid damaging broader China-U.S. relations," Yang said.