China, US ties sour over N.Korea, Taiwan

Relations between China and the United States soured on Friday as Beijing fumed over US arms sales to Taiwan and US sanctions against a Chinese bank linked to North Korea.

The sudden US actions and China's angry response mark a break from the friendlier tone that had emerged after US President Donald Trump hosted Chinese counterpart Xi Jinping at his Florida resort in April.

Chinese foreign ministry spokesman Lu Kang said the US moves "go against the important spirit" of the meeting at Mar-a-Lago and are "inconsistent with the general direction of US-China relations".

"We hope that the US administration can correct their wrongdoings so the US-China relations can go back to the correct track of sound and steady development, so that our important cooperation in other fields will not be affected negatively," he told a regular press briefing.

Lu urged Washington to "stop their wrongful actions" after the US Treasury Department said the Bank of Dandong would be severed from the US financial system for allegedly laundering North Korean cash.

He voiced "firm" opposition to the US administration's approval of a $1.3 billion arms sale to Taiwan, which China considers a rebel province awaiting reunification.

And Lu pushed back against "irresponsible" remarks after the US State Department voiced concerns about basic freedoms in Hong Kong, just as Xi was paying a landmark visit to the semi-autonomous city to mark 20 years since Britain returned the former colony to China.

"It looks like definitely the honeymoon, which was caused by Beijing's promises to do something on North Korea, has ended," Willy Lam, a politics expert at the Chinese University of Hong Kong, told AFP.

"I think this is Trump playing the Taiwan card to put pressure on China to do more on North Korea and maybe also on the trade front," Lam said.

- 'Nobody's off limits' -

But James Reilly, an associate professor in international relations at the University of Sydney, said "China will be less likely to do anything on North Korea" due to the sanctions and the arms sale.

Trump, who lacerated China over its trade policies during the election campaign, toned down the rhetoric after meeting Xi as he sought China's help to pressure its ally North Korea to abandon its nuclear and missile programmes.

But the mercurial US leader raised eyebrows last week in a tweet concluding that China's efforts on North Korea had "not worked out".

The Treasury announcement said Dandong had been identified as "a foreign bank of primary money-laundering concern" that had been "facilitating millions of dollars of transactions for companies involved in North Korea's WMD (weapons of mass destruction) and ballistic missile programs."

The bank will now be prevented from having accounts or doing business with US financial institutions.

The department also sanctioned two Chinese individuals said to have established front companies to facilitate financial transactions for North Korea, and a Chinese shipping company accused of helping smuggle banned luxury goods into the country.

"This is not directed at China, this is directed at a bank, as well as individuals and entities in China," US Treasury Secretary Steven Mnuchin said.

But, he warned, "if we find other activity, we will sanction other entities. Nobody's off limits."

China, which borders North Korea and is considered its only major ally, argues that negotiations are the best way to persuade Pyongyang to halt its nuclear and missile activities.

- S.Korean leader in Washington -

China's approach is echoed by South Korea's dovish new president Moon Jae-In, who arrived in Washington late Wednesday.

Speaking to reporters on his flight to the US, Moon said Seoul and Washington should offer concessions to Pyongyang if it complies with their demands, according to multiple South Korean reports.

"Without rewarding North Korea for its bad actions, South Korea and the United States should closely consult what they may give the North in return for a nuclear freeze," he said.

Moon and Trump were due to have dinner late Thursday and hold formal talks on Friday. They are likely to discuss a controversial US missile defence system that has been set up in South Korea to guard against missile threats from the North.

The deployment of the Terminal High-Altitude Area Defense (THAAD) has infuriated China, which argues that it will destabilise the region.

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