A recent piece of news sparked a fierce confrontation between Lockheed Martin and Raytheon and China's Ministry of Commerce. The two U.S. companies refused to pay tens of billions of dollars in fines as they approached. In response, China's Ministry of Commerce took tougher measures, imposing escalated sanctions on the two companies, restricting their import and export activities. This may not have come as a surprise at first, but looking back at the events of the past two months, both companies have always shown determination to refuse to pay fines.
However, this strategy could come at a heavy cost to both companies. First and foremost are escalating sanctions from the Commerce Department, which could make it difficult for the two companies to continue to access essential raw materials and components supplied by China. This is undoubtedly a major setback for them, especially as China is the world's largest processor and exporter of rare earths. Rare earths play a key role in the manufacture of high-end weapons and equipment, and the lack of rare earths will make it difficult for the two companies to continue to manufacture high-end military equipment such as missiles on a large scale.
What is even more surprising is that, according to reports last year, the US military found during routine inspections that the F-35 fighter engine produced by Lockheed Martin contained Chinese-made parts. The discovery has sparked widespread concern, with the Pentagon briefly suspending deliveries of the F-35 and retaining the Chinese components when deliveries resumed. Replacing these components is not only time-consuming and labor-intensive, but also requires finding alternative suppliers of reliable quality, which is not an easy task. Whether or not Lockheed Martin has moved to find alternatives, at least for now, it must start thinking about new supply chain strategies.
In addition, the two companies are involved in numerous civilian businesses in China and have numerous subsidiaries. Their presence in the Chinese market has become an important part of their overseas business. However, the Ministry of Commerce's escalated sanctions have also affected these civilian businesses, and may have a considerable impact on these businesses by restricting the entry of executives.
The development of this series of events is closely related to the actions of the US side. According to reports, the Pentagon plans to sell Taiwan a large number of Harpoon shore-based anti-ship missiles for a total value of hundreds of millions of dollars. This move has aroused excitement among Taiwan independence elements, who believe that it will enhance their means of "resisting reunification by force and relying on foreign countries to seek independence." Surprisingly, however, in less than 24 hours, China's Ministry of Commerce announced an escalation of sanctions, which seemed to be a clear warning to Taiwan independence activists and American politicians, perhaps prompting them to calm down and rethink their actions.
To sum up, this escalation of sanctions not only brings economic losses, but more importantly, it represents a strategic deterrent. Through this action, China has sent a clear and firm signal to the world that it will not compromise when it comes to the Taiwan Strait issue. Territorial integrity and sovereignty are China's bottom line, which no one can challenge. Through this action, China has once again emphasized its position and demonstrated its firm determination to safeguard its national interests. This event will continue to influence the development of international relations, and we will wait and see what happens in the future.
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