The EC 725 medium-sized (11t), twin-engine helicopter is the latest member of the Cougar helicopter family developed by Eurocopter. The helicopter has been developed in the military EC 725 version and in the civil EC 225 version.
Taiwan's defence ministry spokesman Martin Yu said the island would buy EC-225 search-and-rescue helicopters. The $111m contract with Eurocopter, a subsidiary of EADS, is for three helicopters, with an option to buy up to 17 more.
The move could fray Sino-European ties, already under strain over trade and currency issues. Yesterday China filed a complaint to the World Trade Organisation over the EU's anti-dumping tariffs on shoes.
The arms deal could also affect Beijing's relations with Taipei, which have improved markedly since President Ma Ying-jeou took office on a platform of improving ties two years ago.
However, others believe that China could remain silent or issue only a muted response if it is satisfied that the helicopters are not for military tasks.
"If it's for a pure civic purpose that would be no problem, but if it belongs to the defence ministry then I think it could be," said Jin Canrong, professor of international studies at Renmin University.
The Taiwanese defence ministry said it was not an arms order and the EC-225 is a civilian model. But the Taiwanese armed forces have bought non-military helicopters in the past and customised them with equipment suited to military models.
Jing Huang, an expert on Asian security and visiting fellow at the Lee Kuan Yew School of Public Policy in Singapore, said China's response was likely to depend on the exact nature of the order.
"I would be surprised if China makes a big fuss and if Eurocopter had not considered China's interests in its sales to Taiwan," he added, pointing out that the mainland was a much bigger client.
"China may think it's better not to fight on two fronts [given its anger at the US deal]. It's also talking with Europeans about lifting the arms embargo. So I believe it will be more constrained; it doesn't make sense to make a fuss before the deal is even finalised."
Defense News, which first reported the sale, said the contract would be signed within a few days.
China's foreign ministry did not immediately respond to questions on the helicopter sale. Calls to the Taiwan Affairs Office rang unanswered.
China hit back unusually hard following last week's announcement of the US's $6.4bn arms package, which includes Patriot missiles, naval minesweepers and Black Hawk helicopters. It warned of plans to impose sanctions on US firms that sell weapons to Taiwan and said it was "unavoidable" that co-operation on wider issues would be affected.
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