Defence firms are in the firing line of China's new sanctions.

Hello, you're listening to the Marketplace Morning Report live from the BBC World Service.

I'm Leanna Byrne and a very good morning to you.

China's announced sanctions in five Western defense

firms over the latest round of US arm sales to Taiwan. The announcement comes as

Taiwan prepares to hold presidential and parliamentary elections on January 13th.

The BBC's Monica Miller in Singapore has been following this.

Taiwan is a flashpoint between Washington and Beijing,

and the reason for that is because China sees Taiwan as a breakaway province that will eventually be under Beijing's control according to Beijing and has not ruled out the use of force to take the island.

However, the Taiwanese see itself as distinct from the Chinese mainland with its own

constitution and democratically elected leaders and so US weapons sales to

Taiwan are a frequent source of tension between the two countries.

Now last month the US Department of State approved a $300 million sale of a defense

equipment to help maintain Taiwan's tactical information systems. So China says that the sanctions will

impact individuals and companies, five of them, and one of the companies was

named is BAE Systems Land in Armament. Now China says that the US arm sale to Taiwan

is because of over interference of what it considers its domestic affairs.

And is this likely to impact the wider defense industry?

Chinese official says that these sanctions will freeze any property of the companies have in China

and prohibit organizations and are often mostly symbolic and these American defense contractors generally don't sell to China.

So again, it's Beijing really sending a strong message to Washington ahead of these elections.

Monica Miller there.

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