China holds military drills near Taiwan, threatens sanctions for US companies

China held military drills near Taiwan, days after it threatened U.S. companies with sanctions over a deal with Taiwan.

What's the background?

Taiwan declared its independence from China after World War II, when the nationalist forces of Chiang Kai-shek retreated there as the communist forces of Mao Zedong took over the government. China has refused to acknowledge this, however, and still views Taiwan as nothing more than a rebellious Chinese province.

China has also forced nations, including the United States, that want to do business with it to refrain from treating Taiwan as an independent country. In order to appease China, the U.S. cut off diplomatic ties with Taiwan in 1979.

But from time to time the United States has pushed the limits of this agreement with China. On July 8, the U.S. State Department approved the sale of $2.2 billion worth of military equipment to Taiwan, including Stinger missiles and M1A2T Abrams tanks. This is not the only time that the U.S. has sold weapons to Taiwan: In 2010 the Obama administration approved a deal to sell more than $15 billion in military equipment.

What happened now?

In a statement Sunday, China revealed that it had held military drills for both its navy and its air force in the Taiwan Strait, a region China views as merely part of its "southeast coast."

Despite the timing, China has insisted that the drills are not related to the missile and tank sales.

"These drills were routine arrangements in accordance with annual plans for the military," China's People's Liberation Army said in a statement, according to Reuters.

On Friday, China threatened to punish U.S. companies involved in the deal with stiff retaliatory sanctions. That same day, Chinese Ambassador to the U.S. Cui Tiankai tweeted "#Taiwan is part of #China. No attempts to split China will ever succeed. Those who play with fire will only get themselves burned. Period."