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China Warns US That Rising Tensions Could Jeopardize Talks

Bloomberg logo Bloomberg 2/16/2023 Bloomberg News
Two white balloons float near the Chinese flag as activist Rev. Patrick Mahoney protests against the alleged Chinese surveillance balloon. © Photographer: SAUL LOEB/AFP Two white balloons float near the Chinese flag as activist Rev. Patrick Mahoney protests against the alleged Chinese surveillance balloon.

(Bloomberg) -- China questioned whether the US genuinely seeks to repair ties damaged by the dispute over a balloon just as the two nations’ top diplomats head to a security conference in Germany, where they may have an opportunity to meet on the sidelines.

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The balloon saga “tests the US’s sincerity and capability to properly handle crises and stabilize relations with China,” Foreign Ministry spokesman Wang Wenbin said Thursday at a regular press briefing in Beijing.

“The US cannot ask for communication and dialog on the one hand while sharpening differences and escalating crises on the other,” he said, later calling on Washington to “properly handle this unexpected, isolated incident” and put ties back on track.

Read More: China to Fine Lockheed Martin, Raytheon for Taiwan Arms Sale

Secretary of State Antony Blinken and Wang Yi, China’s top diplomat, could hold their first talks since the balloon crisis kicked off nearly two weeks ago when they head to the Munich Security Conference starting Friday.

The two had been considering a meeting, people familiar with the matter said, but China on Wednesday escalated the dispute by warning it will hit the US with “countermeasures” over the episode, which started when the the Biden administration shot down what it said was a spy balloon that had drifted over the entire continental US.

Beijing didn’t say what those countermeasures would entail, but on Thursday the government announced sanctions and fines against two key American defense companies due to their participation in arms sales to Taiwan: Lockheed Martin Corp. and a subsidiary of Raytheon Technologies Corp. 

The move comes after the Biden administration added Chinese firms to an export blacklist last week over what it argues are links to a military-backed global balloon espionage program. China has said the aircraft was a civilian device collecting weather data when it was blown off course.

Read More: What the Balloon Saga Tells Us About China’s Spying: QuickTake

As the balloon crisis worsened, the US said Beijing rebuffed attempts to arrange a phone call between the two countries’ top defense officials. The Pentagon asked for a call between Defense Secretary Lloyd Austin and Defense Minister Wei Fenghe right after the balloon was shot down on Feb. 4, but China “declined our request,” Brigadier General Pat Ryder said in a statement. 

The uproar soured ties that had been improving since President Joe Biden and Chinese leader Xi Jinping met in Indonesia in November, the first in-person gathering between the leaders of the world’s biggest economies since the pandemic began. 

“I absolutely believe there need not be a new Cold War,” Biden said after the November talks.

The US president may address the balloon crisis in a public address as early as Thursday, the Washington Post reported, citing unidentified people familiar with the plans.

(Adds sanctions over Taiwan arms sales from sixth paragraph.)

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