Relations between the world’s two largest economies look to be entering a new phase of turbulence after the US punctured Chinese celebrations of the anniversary of Hong Kong’s return by unveiling sanctions against a Chinese bank linked to North Korea and a major arms sale to Taiwan. The US state department on Thursday gave the green light to a total of $1.4bn in arms sales to Taiwan, a self-governing island which China considers its own territory. Sanctions were also announced targeting a Chinese bank accused of serving as “a conduit for illicit North Korean financial activity”.
