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Edition: U.S. Article Comments (62) Save Email Print Reprints Most Popular Most Shared China PLA officers urge economic punch against U.S. 12:00pm EST Study shows why it is so scary to lose money 08 Feb 2010 Moscow says U.S. missile shield aimed at Russia 7:59am EST Age of mother affects child's autism risk: study 08 Feb 2010 Study links sugary soft drinks to pancreas cancer 08 Feb 2010 China PLA officers urge economic punch against U.S. 12:00pm EST Study links sugary soft drinks to pancreas cancer 08 Feb 2010 Age of mother affects child's autism risk: study 08 Feb 2010 Study shows why it is so scary to lose money 08 Feb 2010 Study toasts beer as being good for your bones 9:06am EST China PLA officers urge economic punch against U.S. Chris Buckley BEIJING Tue Feb 9, 2010 12:00pm EST Related News CORRECTED - WRAPUP 6-Obama to meet Dalai Lama despite Chinese warnings Wed, Feb 3 2010 WRAPUP 6-Obama to meet Dalai Lama despite Chinese warnings Tue, Feb 2 2010 Members of the Chinese People's Liberation Army (PLA) Air Force Aviation stand at attention during a training session at the 60th National Day Parade Village in the outskirts of Beijing, September 15, 2009. Credit: Reuters/Joe Chan BEIJING (Reuters) - Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan. World The calls for broad retaliation over the planned U.S. weapons sales to the disputed island came from officers at China's National Defence University and Academy of Military Sciences, interviewed by Outlook Weekly, a Chinese-language magazine published by the official Xinhua news agency. The interviews with Major Generals Zhu Chenghu and Luo Yuan and Senior Colonel Ke Chunqiao appeared in the issue published on Monday. The People's Liberation Army (PLA) plays no role in setting policy for China's foreign exchange holdings. Officials in charge of that area have given no sign of any moves to sell U.S. Treasury bonds over the weapons sales, a move that could alarm markets and damage the value of China's own holdings. While far from representing fixed government policy, the open demands for retaliation by the PLA officers underscored the domestic pressures on Beijing to deliver on its threats to punish the Obama administration over the arms sales. "Our retaliation should not be restricted to merely military matters, and we should adopt a strategic package of counter-punches covering politics, military affairs, diplomacy and economics to treat both the symptoms and root cause of this disease," said Luo Yuan, a researcher at the Academy of Military Sciences. "Just like two people rowing a boat, if the United States first throws the strokes into chaos, then so must we." Luo said Beijing could "attack by oblique means and stealthy feints" to make its point in Washington. "For example, we could sanction them using economic means, such as dumping some U.S. government bonds," Luo said. The warnings from the PLA come after weeks of strains between Washington and Beijing, who have also been at odds over Internet controls and hacking, trade and currency quarrels, and President Barack Obama's planned meeting with the Dalai Lama, the exiled Tibetan leader reviled by China as a "separatist." MILITARY SPENDING BOOST Chinese has blasted the United States over the planned $6.4 billion arms package for Taiwan unveiled in late January, saying it will sanction U.S. firms that sell weapons to the self-ruled island that Beijing considers a breakaway province of China. China is likely to unveil its official military budget for 2010 next month, when the Communist Party-controlled national parliament meets for its annual session. The PLA officers suggested that budget should mirror China's ire toward Washington. "Clearly propose that due to the threat in the Taiwan Sea, we are increasing military spending," said Luo. Last year, the government set the official military budget at 480.7 billion yuan ($70.4 billion), a 14.9 percent rise on the one in 2008, continuing a nearly unbroken succession of double-digit increases over more than two decades. The fresh U.S. arms sales threatened Chinese military installations on the mainland coast facing Taiwan, and "this gives us no choice but to increase defense spending and adjust (military) deployments," said Zhu Chenghu, a major general at China's National Defence University in Beijing. In 2005, Zhu stirred controversy by suggesting China could use nuclear weapons if the United States intervened militarily in a conflict over Taiwan. The United States switched official recognition from Taiwan to China in 1979. But the Taiwan Relations Act, passed the same year, guarantees Taiwan a continued supply of defensive weapons. China has the world's biggest pile of foreign currency reserves, much of it held in U.S. treasury debt. China held $798.9 billion in U.S. Treasuries at end-October. But any attempt to use that stake against Washington would probably maul the value of China's own dollar-denominated assets. China has condemned previous arms sales, but has taken little action in response to them. But Luo said the country's growing strength meant that time has passed. "China's attitude and actions over U.S. weapons sales to Taiwan will be increasingly tough," the magazine cited him as saying. "That is inevitable with rising national strength." (Editing by Jeremy Laurence) World Comments See All Comments (62) | Post Comment Feb 09, 2010 12:12pm EST PLEASE DO IT! We really don’t need our future tied together with the Chinese Communists, who undermine us at every turn. You are doing us a favor by doing so! We need to get our own house in order! Let’s up the ante and sell nukes to Taiwan! lesechang Report As Abusive Feb 09, 2010 12:14pm EST And so it begins… LittleOldMe Report As Abusive Feb 09, 2010 12:14pm EST Go Obama!!! Keep up the weak stance, I’m sure the they’ll take pity on you eventually! Haha running the U.S. isn’t quite as easy as your grandiose campaign speeches made it out to be eh? CoLeo Report As Abusive Feb 09, 2010 12:18pm EST New era of diplomacy,…. what happend Mr Obama? It appears the communists and dictators alike are in high gear while you lecture us on universal health care and plunge our nation further into debt. I would welcome Bush back with open arms after the last 13 miserable, uninspiring, months. IntelliQ Report As Abusive Feb 09, 2010 12:21pm EST That’s fair! I have stopped buying anything made in China! It’s on! qtaug Report As Abusive Feb 09, 2010 12:24pm EST nope our president doesnt give a darn all he cares about is that he was the president that passed the HCare bill and b rought socialism to the usllll putercat Report As Abusive Feb 09, 2010 12:27pm EST This action would cause world markets to react and the ‘quid pro quo’ would be to start tariffs and banning of China’s products in the US which would cause their markets to crash along with the rest of the world. Shows just how dangerous their military actually can be if given the decision-making authority in China. It also shows the dangerous game Obama plays by running up a defict in our country. RetiredNavy Report As Abusive Feb 09, 2010 12:29pm EST I buy product from China by the container load. I will stop and buy from India if they pull this stunt….What goes around comes around… Report As Abusive Feb 09, 2010 12:30pm EST I hope they do it… if we had any balls we would just announce that we are not going to make payments on any US bonds, like the South American countries did in the not so long ago past. Then we would force the US government to live on a budget of what they have not what the politicians want. Yirmin Report As Abusive See All Comments (62) Add a Comment More from Reuters Toyota to recall more 2010 Camrys in U.S. DETROIT (Reuters) - Toyota Motor Corp will recall 7,314 model-year 2010 Camry sedans in the United States due to the risk that a potential defect in steering may make it harder for drivers to stop the vehicle. Wall Street jumps on reports of help for Greece | Video Study shows why it is so scary to lose money Ukraine's Tymoshenko girds to contest result | Video MetLife may pay AIG in stock, cash for unit: source Toyota recalls new Prius in latest safety fix | Video » More Top News Analysis: Ganging up on Toyota The harsh response to Toyota's woes are fueling talk of protectionism and regulators deflecting criticism for dropping the ball. Full Article A high-speed death for cautious driver Shareholders sue Toyota in California "Exceptionalism" comes back to bite Would you buy a Toyota? Autos Felix Salmon: Greece's Goldman connection Did Greece hide the true nature of its deficits and debt using clever derivatives dreamed up by Goldman Sachs? Full Article Political economy and the euro EU rescue talk for Greece heats up Global Markets © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts.com Buyouts Europe: Buyouts Conferences: Venture Capital Journal EVCJ International Financing Review International Securitisation Report Project Finance International PEhub.com PE Week Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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