WASHINGTON — China curtailed military exchanges with the United States on Saturday and threatened to sanction U.S. firms in retaliation for proposed American weapon sales to Taiwan.
The moves signaled a souring of relations between the world's two largest economies.
China's actions, reported by its state-run news agency, came a day after President Barack Obama told Congress he would sell Taiwan $6.4 billion in helicopters, missile defense rockets, mine-hunting ships and other materiel.
China also suspended military-to-military contacts with the Pentagon the last time Washington sold weapons to Taiwan — which Beijing regards as a renegade province — in 2008. But the threat to limit dealings with U.S. companies that sell weapons to Taiwan was new and suggests China is willing to use its growing economic power as a diplomatic tool.
"The U.S. plan will definitely further undermine China-U.S. relations and bring about serious negative impact on exchanges and cooperation in major areas between the two countries, and lead to aftermath both sides are unwilling to see," Chinese Vice Foreign Minister He Yafei said, according to the Xinhua news agency.
Xinhua said He called in U.S. Ambassador to China Jon Huntsman on Saturday to protest the weapons sale.
In Washington, the State Department defended the sale, saying the U.S. is obligated to provide the island defensive weapons under the 1979 Taiwan Relations Act.
The sale is consistent with U.S. policy toward China and Taiwan, "and contributes to maintaining stability and security across the Taiwan Straits," State Department spokeswoman Laura Tischler said.
China also could retaliate by making life more difficult for the Obama administration in other ways, such as diplomacy over Iran's suspected nuclear weapons program.
Obama is trying to convince a skeptical China to join other permanent, veto-holding members of the U.N. Security Council to agree to new sanctions on Iran.
In an appearance Friday in Paris, Secretary of State Hillary Clinton issued a blunt warning to Beijing that it might jeopardize its long-term interest in a stable Middle East with secure energy supplies by refusing to join in action on Iran.
Since taking office, Obama has tried to keep relations with China on a solid footing. He visited China in November.
Disputes have flared on a number of touchy issues, however, including trade, climate change and a threat by Internet giant Google to leave the Chinese market to protest computer hacking of its members' accounts.
Still, both the United States and China have good reasons not to let relations spin out of control. The United States is a huge market for Chinese goods, which helps fuel its economic growth, while China's government holds nearly $800 billion in U.S. debt, according to Treasury Department figures.
Senior U.S. officials predicted that once the initial storm blows over, the two countries would continue cooperation on a range of issues.
"We have a very mature relationship with the Chinese. Issues like this come up from time to time. ... I don't think this will have a fundamental effect on the bilateral relationship as a whole," a senior administration official said Friday, before China's officially announced its reaction. He spoke on condition of anonymity under State Department imposed ground rules.
Answering questions after a speech in Paris on Friday, Clinton said China should re-think its aversion to new sanctions on Iran. While Beijing may be reluctant to punish a country that provides much of its energy needs, the Middle East instability caused by a nuclear-armed Iran could harm it even more, she suggested.
China "will be under a lot of pressure" to approve sanctions, Clinton said, and should recognize "the destabilizing impact that a nuclear-armed Iran would have in the (Persian) Gulf, from which they receive a significant percentage of their oil supply."
With U.S. and European encouragement, Saudi Arabia and other Persian Gulf countries recently have tried to shift China away from its dependence on Iran, offering Beijing reassurance about its oil supplies. Saudi Arabia, a Sunni Islam-dominated Arab nation, is worried about a nuclear weapon in the hands of Shiite Muslim and Persian Iran.
The proposed weapons sale to Taiwan includes 114 PAC-3 missile defense rockets, 60 UH-60M Black Hawk helicopters, a dozen Harpoon anti-ship missiles, two mine-hunting ships, and communications and surveillance equipment.
Congress has 30 days to block the sale, but appears unlikley to do that. Indeed, some lawmakers want the administration to sell Taiwan even more advanced weapons, including F-16 fighter jets.
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