Taiwan's purchase of weapons from the United States is becoming a critical issue for China, as ties between the world's two largest economies decline over a trade dispute and Europe is emerging as a challenger, a European analyst says.

Michal Thim, a Taiwan analyst, says the $330 million planned purchase of arms by Taiwan is providing Beijing another reason to forgo improving bilateral relations with Washington. "Europe's arms suppliers may find the situation ripe for taking a greater share in Taiwan's defense projects. Their governments may very well give them the green light," commented Thim.