- The Washington Times - Saturday, May 24, 2003

BEIJING — China yesterday angrily rejected U.S. accusations that a major Chinese conglomerate helped Iran’s missile program, insisting it opposes the spread of weapons of mass destruction.

The Bush administration Thursday announced sanctions on Northern Industries Corp., which it said sent Iran unspecified technologies or materials that could help develop long-range missiles capable of carrying such weapons. Officials said the company’s goods are barred from U.S. markets for two years.

“The Chinese side’s company has not offered help to the relevant projects of Iran,” said a Foreign Ministry statement faxed to reporters. “The United States is imposing its own national policy on others for no good reason.”

The company, known as Norinco, was created in 1980 as a weapons maker and expanded into an array of businesses, including manufacturing, construction and hotels.

A U.S. State Department spokeswoman, in announcing the sanctions, also said Washington would take action against the Chinese government’s proliferation activities — the first such warning to accompany penalties against a Chinese company.

According to U.S. documents made public Thursday, the sanctions went into effect May 9 under two executive orders issued by Mr. Bush aimed at curbing arms transfers, but were only publicly revealed this week.

Beijing has not signed the global treaty on sales of missiles and related technologies, but agreed to abide by its restrictions.

“The Chinese government has consistently pursued a policy of opposing the proliferation of weapons of mass destruction and their carrier rockets,” the Foreign Ministry statement said.

Last July, Washington punished nine Chinese entities accused of transferring weapons technology or related goods to Iran. But the economic and political impact of sanctions on Norinco, a major Chinese exporter, threaten to be much greater.

Bush administration officials said a conservative estimate of the impact of the sanctions could mean “hundreds of millions” of dollars in lost sales for Beijing.

The government also imposed sanctions on an Iranian government missile producer, Shehid Hemmat Industrial Groups, which has been involved in Iran’s short- and medium-range missile programs since the mid-1990s.

An official of Norinco’s management office in Beijing said it was reviewing the U.S. accusations.

“The sanctions are unilateral by the United States, so we don’t know whether it’s legal or accurate,” said the official, who refused to give his name. “No matter what happens, the company follows United Nations regulations and international law.”

The Norinco manager refused to give details about the company’s exports to the United States or other business there.

Norinco’s Web site says its exports and imports since 1980 total $25 billion. It also says the company operates in more than 10 countries with products including firearms, optical equipment and firefighting gear.

The State Department announcement Thursday noted export controls imposed by China and said its nonproliferation performance was improving. But it said Beijing had problems enforcing such rules, adding that Washington wouldn’t “paper over” their differences.

Iran’s Shahab 3 missile has an 800-mile range — enough to reach Israel and U.S. troops stationed in an area extending from Turkey to Afghanistan. U.S. officials have said Iran is trying to develop an upgraded missile capable of reaching a number of NATO countries in Western Europe.

The sanctions will do little to improve relations with China just days ahead of a meeting between Mr Bush and the new Chinese president, Hu Jintao, during Mr. Bush’s upcoming European tour.

“Politically, it won’t be a good thing, but it won’t affect the first summit meeting very substantially,” Zhu Feng, director of the International Security Program at Peking University, said in an interview yesterday with the British Broadcasting Corp.

“In the context of U.S. pressure on Iran, it’s a big warning to China that it has to watch what it’s doing,” he said.

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