Taiwan says the arms deal will make it feel more secure
The US has defended a proposed weapons sale to Taiwan following a furious response from China.
The US State Department said on Saturday that the sale contributed to "security and stability" between Taiwan and China, Reuters reported.
Beijing announced a series of moves against the US in retaliation for the proposed $6.4bn (£4bn) sale.
Ties between the two countries are already strained by rows over trade and internet censorship.
Damian Grammaticas, BBC News, Beijing
You would expect China to react angrily to any proposed arms sale to Taiwan, but this time it seems to be going further than before.
Suspending military exchanges is a classic reply from Beijing and it may not even concern the US too much.
China's threat to impose sanctions on US firms supplying arms to Taiwan is interesting if perplexing.
It's unclear what "sanctions" would involve in practice, since US firms aren't allowed to sell arms to China
China's threat to withdraw co-operation on key international and regional issues is the most serious one. Here China can make life difficult for Washington.
It can complicate US attempts to deal with nuclear programmes in Iran and North Korea, it can refuse to help in currency and trade issues.
But what is China trying to achieve by sounding so furious? Maybe Beijing's real aim is to try to deter America from future arms sales - for example the fighter jets and submarines which Taiwan really wants.
"Such sales contribute to maintaining security and stability across the Taiwan Strait," said US State Department spokeswoman Laura Tischler, quoted by Reuters.
The US is the leading arms supplier to Taiwan and has a treaty obligation to provide it with defensive arms.
Beijing said it would suspend military exchanges with the US, review co-operation on major issues and impose sanctions on companies selling arms.
However, the US - like the EU - has banned its companies selling arms to China since the 1989 Tiananmen Square massacre, so it was not clear what effect Chinese sanctions would have.
Chinese defence ministry spokesman Huang Xueping said the measures reflected the "severe harm" posed by the deal.
A foreign ministry spokesman said the arms deal would have "repercussions that neither side wishes to see".
Taiwan and China have been ruled by separate governments since the end of a civil war in 1949.
Beijing has hundreds of missiles pointed at the island and has threatened to use force to bring it under its control if Taiwan moved towards formal independence.
Defence ties between Washington and Beijing have been on ice for several years because of differences over Taiwan, though the two countries' leaders pledged to improve them in 2009.
Ruled by separate governments since end of Chinese civil war in 1949
China considers the island part of its territory
China has offered a "one country, two systems" solution, like Hong Kong
Most people in Taiwan support status quo
Taiwan, meanwhile, welcomed the US move.
"It will let Taiwan feel more confident and secure so we can have more interactions with China," the Central News Agency quoted President Ma Ying-jeou as saying.
The Pentagon earlier notified the US Congress of the proposed arms sale, which forms part of a package first pledged by the Bush administration.
Friday's notification to Congress by the Defense Security Co-operation Agency (DSCA) was required by law. It does not mean the sale has been concluded.
US lawmakers have 30 days to comment on the proposed sale, Associated Press reported. If there are no objections, it would proceed.
PROPOSED ARMS SALE
114 Patriot missiles ($2.81bn)
60 Black Hawk helicopters ($3.1bn)
Communication equipment ($340m)
2 Osprey mine-hunting ships ($105m)
12 Harpoon missiles ($37m)
Source: Defense Security Co-operation Agency
The arms package includes 114 Patriot missiles, 60 Black Hawk helicopters and communications equipment for Taiwan's F-16 fleet, the agency said in a statement.
It does not include F-16 fighter jets, which Taiwan's military has been seeking.
Last week US Secretary of State Hillary Clinton angered Beijing with a call to China to investigate cyber attacks on search giant Google, after the company said email accounts of human rights activists had been hacked.