The Pentagon is bracing for a potential cutoff of its ambitious military exchange program with China next week in response to the latest congressional notification of some $1 billion in arms sales to Taiwan.

Defense officials said formal notification of the arms package aimed at bolstering the island’s defenses will be sent to Congress this week. It will include offers to sell two Navy frigates and some 12 AAV-7 amphibious assault tanks. Missiles in the package will include Stinger anti-aircraft missiles and Javelin and TOW anti-tank missiles.

The major items in the package are two decommissioned guided-missile frigates, the USS Gary and the USS Taylor. Sale of the Perry-class warships was approved earlier but notification has been delayed for years.

The Obama administration, fearful of upsetting Beijing, rejected offering Taiwan new and more modern F-16 jets in the arms package. The Taiwanese military has sought the new jets for years to replace aging F-16s in its arsenal.

The notification to Congress will be the first arms sale to Taiwan in four years and comes amid growing congressional pressure on the White House to do more to assist Taiwan.

The United States is obligated under the 1979 Taiwan Relations Act to aid the island’s defense from a mainland attack or invasion. Taiwan split from China in 1949 during the Chinese civil war.

China reacted harshly to the January 2010 arms sale to Taiwan, which was worth $6.4 billion, by cutting off military ties with the U.S. for 10 months. In response to the September 2011 arms package worth some $5.8 billion was relatively muted. A few military exchanges were postponed after the 2011 announcement.

Chinese state-run press reports, a reflection of official views, in recent weeks offered mixed accounts of Beijing’s reaction to the new arms sale. Some official media contained threats of unspecified action. Others boasted that the latest weapons sale will be more limited than in the past, reflecting pressuring from Chinese leaders on the Obama administration to scale back arms transfers.

The Communist Party-affiliated Global Times newspaper warned that new arms sales to Taiwan will undermine U.S.-China ties. But the news outlet also said it regarded that smaller $1 billion sale this year to be a sign that less-advanced arms will be transferred.

"U.S. arms sales to Taiwan have already been surrounded by many new issues, and how the United States plays its cards on this old issue and how China counters will be a pair of moves by both countries on the overall chess board," the Global Times stated.

China’s military newspaper, the PLA Daily, reported Dec. 4 that U.S. arms sales to Taiwan have decreased in both numbers and frequency and that U.S. efforts to restore a military balance across the 100-mile Taiwan Strait is impossible.

"The time when the U.S. and Taiwan can conclude arms deals as they wish without paying heed to the mainland is gone," the newspaper stated.

"China has more resources and means to game with the United States," the newspaper stated. "Every time the U.S. sells weapons to Taiwan, even if it’s just a screw for military use, China should make it pay and force it to eventually stop the sale once and for all."

The Pentagon has launched a large-scale military exchange program designed to build trust. However, critics say the exchanges provide valuable intelligence to China on U.S. warfighting capabilities.

"China will be obliged to make pro forma protests and may cancel a military delegation, but the Chinese army has always reaped more intelligence from military-to-military operations with the U.S. than it wants to sacrifice for diplomatic posturing," said John Tkacik, a former State Department official who worked on Chinese affairs.

Stratfor, a geopolitical analysis firm, stated in a recent report that military exchanges between Washington and Beijing are "speeding up" despite tensions over Chinese island-building in the South China Sea. An example was the meeting in Beijing last month between People’s Liberation Army officials and a U.S. Army delegation, in the first army-to-army dialogue.

Stratfor said the new arms sale to Taiwan will be a test for the exchange program. "This will be especially important to watch given China’s stock response to such deals under the previous two administrations: suspending U.S. military-to-military ties," the report said, noting that a suspension of the exchange program is not expected.

Taiwan-mainland ties remain stable. In October, President Ma Ying-jeou of Taiwan met in Singapore with President Xi Jinping of China. It was the first meeting between the two leaders. Ma pressed Xi on the nearly 2,000 Chinese missiles deployed within striking range of Taiwan and was told the missiles are not targeting the island but are part of China’s regional military strategy.

Tkacik said the "Christmas present" of the arms package for Taipei "is a sign that even the Obama administration is alarmed by China’s expanding hegemony in East Asia."

An Obama administration official said arms sales are part of a U.S. strategy toward Taiwan he described as "deter an attack, and if deterrence fails, delay until the cavalry arrives."

Discussions with Taiwanese officials in recent years on arms transfers have included possible sales of anti-ship missile, drone aircraft, sea mines and mine-clearing gear, and cooperation with U.S. special operations forces.

Larry Wortzel, a former military intelligence official, said he expected China’s leaders to issue strong rhetorical and symbolic reactions to the arms sale and accuse the United States of undermining Chinese sovereignty and promoting regional U.S. hegemony.

"In a symbolic protest, the People’s Liberation Army, for some period of time, will cancel senior officer visits or exchanges as well as some form of military contacts," Wortzel said. "Bilateral trade, however, is unlikely to be affected and Beijing will continue its campaign of cyber espionage and forced technology transfers."

Michael Pillsbury, a longtime Pentagon consultant on China, said the modest arms sale could be viewed by Beijing as Obama exercising extreme restraint and possibly reacting less harshly.

"Taiwan has requested a much larger arms package in the last few years," he said.

China may show restraint by not disrupting U.S.- China military ties as has been Beijing’s reflex response in the past.

"Our military relations with China have already for the first time been challenged by Congress," Pillsbury said. "Even the smallest disruption by China in this program plays into the hands of China many critics."

Sen. John McCain (R., Ariz.), chairman of the Senate Armed Services Committee last month called on President Obama to boost arms sales to Taiwan even if it disrupts ties with Beijing.

"While recent relations between Taiwan and China have been more encouraging, we remain concerned that China’s ongoing military modernization, and the threat it poses to peace and security in the Taiwan Strait, is not being adequately addressed," McCain stated in a letter co-signed by Sen. Ben Cardin (D., Md.), ranking Democrat on the Senate Foreign Relations Committee.

The senators urged approval of new weapons, including advanced F-16s.

Earlier this month, two members of Congress, Rep. Brad Sherman (D., Calif.) and Rep. Ed Royce (R., Calif.), the chairman of the Foreign Affairs Committee, introduced legislation that would require the administration to speed up the transfers of the two Navy frigates.

The bipartisan U.S.-China Economic and Security Review Commission warned in its latest annual report that the military balance across the Taiwan Strait has shifted sharply in Beijing’s favor.

"Over the past decade, the balance of power across the Taiwan Strait has shifted significantly in China’s favor; China now enjoys both a quantitative and a qualitative advantage over Taiwan and is capable of conducting a range of military campaigns against Taiwan," the report said.

China has refused to denounce the use of force to reunite the island with the mainland and has focused a major portion of its large-scale military buildup on weapons and forces needed to retake Taiwan.

A Pentagon official said one joke circulating among officials involved in Asian affairs is that the next arms sale to Taiwan will trigger widespread Chinese cyber attacks and theft of U.S. technology.

China has been engaged in a massive theft of data and technology from U.S. government and private sector networks.

A spokesman for the U.S. Pacific Command, which is heavily involved with the military exchange program with China, did not respond to emails seeking comment.