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China has warned the United States that its recently announced arms package to Taiwan will hurt military exchanges between the two countries.

Speaking today, Defence Ministry spokesman Geng Yansheng said that high-level exchanges, joint drills, and other major activities will be affected by the planned $5.85 billion package, ‘in light of the serious damage’ that will result from the sale, the Associated Press reported.

The statement, made to a press conference only Chinese media were allowed to attend, followed the announcement last week that the Obama administration planned to offer to retrofit Taiwan’s aging fleet of 145 F-16 A/Bs, as well as provide training for pilots and spare parts for maintaining the island’s F-5 jets and C-130 transport planes.

There have also been calls in the media and among the military for commercial reprisals against companies involved in the upgrades, Time notes, ‘but China's own fledgling commercial aerospace and other high-tech industries rely heavily on American technical expertise.’

The Obama administration notified Congress last Wednesday of its intention to retrofit the F-16 A/B fighters rather than meet a Taiwanese request for 66 new F-16s to replace the aging F-5 aircraft. Both proposals have been criticized by China, but the decision to hold off on the sale of the new F-16 C/Ds will almost certainly have been seen by China as the lesser of the two evils.

According to a news release by the Pentagon’s Defence Security Co-operation Agency:

‘This proposed sale serves US national, economic, and security interests by supporting the recipient’s continuing efforts to modernize its armed forces and enhance its defensive capability.  The proposed sale will help improve the security of the recipient and assist in maintaining political stability, military balance, and economic progress in the region.’

Still, China sees any arms sales to Taiwan as interfering in the country’s internal affairs, and it has previously made clear its willingness to disrupt military ties, having suspended military exchanges at the start of last year following the announcement of a $6.4 billion arms package to Taiwan in January. This followed the freezing of military cooperation for the remainder of the Bush administration after the White House notified Congress in October 2008 of its plans to sell Taiwan $6.5 billion in defence equipment.

So, is Beijing likely to repeat the process?

‘As far as I can tell, the Chinese are considering cancelling or delaying bilateral endeavours that the United States values, but that have yet to mature, maritime security cooperation being the main such effort,’ says James Holmes, a professor of strategy at the US Naval War College. ‘US maritime strategy documents place enormous weight on multinational policing of the commons, and Washington covets Chinese help –not only because Beijing has a wealth of assets to contribute, but in hopes of fashioning an amicable relationship at sea.’

Specifically, Holmes says this could include the postponement or cancelation of a combined counter-piracy exercise in the Gulf of Aden and meetings on US-China cooperation. ‘Because a cooperative relationship has been slow to take shape, Beijing can withhold participation in such events to signal displeasure while linking US support of Taiwan to other US interests in the region,’ he says. ‘In short, China's leadership can threaten to make the United States pay a price for supporting Taipei, and it can do so without setting back counter-piracy, counter-proliferation, and so forth in any real fashion.’

It is, Holmes adds, ‘a nifty bit of diplomatic communication vis-a-vis Washington.’