- The Washington Times - Saturday, January 26, 2002

BEIJING (Agence France-Presse) China yesterday condemned as "unreasonable" U.S. sanctions imposed on three Chinese firms accused of supplying Iran with materials used to make chemical and biological weapons.

"The U.S. decision to impose sanctions on Chinese companies using so-called domestic laws and country-specific policy is unreasonable and should be cancelled," the Foreign Ministry said in a statement.

It said that China, as a member of an international convention on the restriction of chemical weapons, exercised strict controls over the export of materials that could be used to manufacture such weapons.

"China is opposed to any country developing chemical weapons, and furthermore does not help any country develop chemical weapons," the statement said.

State Department spokesman Richard Boucher said Thursday restrictions had been placed on Liyang Chemical Equipment, the China Machinery and Electric Equipment Import and Export Co., and an individual broker and agent named as Q.C. Chen.

"The penalties were imposed for the transfer to Iran of equipment and technology that's used for the manufacture of chemical and biological weapons; equipment that's controlled under what's called the Australia Group," he said.

The Australia Group is a 34-nation informal agreement designed to ensure the export of certain chemicals does not contribute to the spread of chemical weapons. The United States is a participant in the group. China and Iran are not.

The sanctions were imposed on Jan. 16 under the Iran Nonproliferation Act of 2000 U.S. legislation that prohibits the sale of chemical and biological weapons components and missile technology to Iran, designed to stop Tehran from acquiring weapons of mass destruction.

The sanctions, which will be in effect for two years, prohibit U.S. government contracts with the three businesses and bars them from purchasing defense items from the United States.

The U.S. announcement, less than a month before President Bush is due in Beijing for a summit with President Jiang Zemin, puts the spotlight on China's proliferation record.

A level of cooperation has emerged in mutual relations recently after the two sides agreed to work together to combat terrorism in the wake of the September 11 terrorist attacks.

However, weapons proliferation ranks with human rights and Taiwan as issues having the potential to derail ties.

U.S. Ambassador to China Clark Randt said this week that China's actions in limiting the spread of weapons was a "make or break" issue for future ties.

Washington was not satisfied with China's weapons-export controls, he said, and nonproliferation would be one of the issues raised by Mr. Bush during his visit.

"We do not want Chinese materials or technology involved in the production and delivery of weapons of mass destruction to wind up in the wrong hands," Mr. Randt said during a speech in Hong Kong.

"Our experience to date is that China does not have an effective export-control regime for sensitive materials and items. I should be crystal clear on this point. Nonproliferation is a make or break issue for us."

This is the second time in less than six months that Washington has imposed sanctions against Chinese companies believed to be involved in proliferation.

On Sept. 1, Washington imposed sanctions on a Chinese state-owned firm it accused of funneling missile technology to Pakistan. China denied the charges and Pakistan said it received no missile components.

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