January 30, 2010 4:13 PM

China responds angrily to U.S. arms sales to Taiwan

China curtailed military exchanges with the United States on Saturday and threatened to sanction U.S. firms in retaliation for proposed American weapon sales to Taiwan. China has cut off U.S. military exchanges before, but threatening sanctions on U.S. companies is new and may signal China's willing to use its growing economic power in diplomatic disputes.

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