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Then, in response to the White House's announcement of limited arms sales to Taiwan, the Chinese suspended bilateral military programs and security talks with the U.S. and, for the first time ever, announced they would impose sanctions on American companies selling weapons to the island republic. The Foreign Ministry also promised Washington there would be a "grave aftermath."

Days later, Zhu Weiqun, a senior Communist Party official, hinted China would try to injure the American economy if President Obama were to meet with the Dalai Lama later this month in Washington, as the American leader said he would.

All these warnings and threats were issued after Obama, at the beginning of his administration, adopted an uncharacteristically conciliatory posture toward China. The...