China sanctions US firms over arms sales to Taiwan

China said on Monday it would sanction three U.S. defense companies over their sales of arms to Taiwan, as the self-ruled island inaugurated a new president.

U.S. firms General Atomics Aeronautical Systems, General Dynamics Land Systems, and Boeing Defense, Space & Security will be added to Beijing's list of "unreliable entities," the country's Commerce Ministry said.

"They will be barred from engaging in China-related import or export activities, and are forbidden to make new investments in China," the state-run Xinhua news agency said.

"Senior executives of the companies are prohibited from entering China, while their work permits will be revoked," it said.

The announcement came as Lai Ching-te was sworn in on Monday as president of the democratic island in the face of growing Chinese military pressure.

China claims Taiwan as part of its territory and has branded 64-year-old Lai a "dangerous separatist" who will bring "war and decline" to the island.

Washington switched diplomatic recognition from Taipei to Beijing in 1979 but it has remained Taiwan's most important partner and biggest arms supplier.

The United States approved a huge military aid package for Taipei last month, including $1.9 billion for replenishing its military equipment and training.

Another $2 billion will be used for "foreign military financing" for countries in the region.

Beijing seethed over the package, warning it would increase the "risk of conflict" along the strait.