U.S. satellite deal a blow to China amid pressure

U.S. satellite deal a blow to China amid pressure

BEIJING (Agencies): Washington's decision to ban the sale of a high-tech satellite to a company with Chinese links is a blow to China amid growing pressure on its relations with the United States, analysts said on Wednesday.

The U.S. veto of the sale of a 450-million-dollar Hughes communications satellite system to a Chinese-led consortium because of national security concerns came as Washington and Beijing got to grips with thorny trade issues and prepared for the U.S. visit of Premier Zhu Rongji in April.

"There will probably be some effect on bilateral relations although it's hard to say how much," said Zhang Tuosheng, director of research at the privately-funded Foundation for International and Strategic Studies here.

A European expert in Beijing said the decision not to grant an export license was "a hard blow" to China's budding space industry, which had hoped to enter the international market with the U.S. technology.

"It is a hard blow for China. The Chinese have made many efforts to cooperate with the United States in the space industry and had counted on the U.S. satellites to increase their market share in the global satellite-launching industry," the expert told AFP.

The move comes less than a week before U.S. Secretary of State Madeleine Albright is expected in China to prepare for Zhu's first U.S. visit in April.

Analysts say the trip will be crucial for putting relations -- hit in recent months by trade and human rights concerns and technology transfer issues -- back on track.

The China Great Wall Industry Corp., the commercial satellite launcher, declined to comment on the implications for the industry.

The United States feared that the technology would be used by the Chinese military, which is a main partner of the company. China Satellite Launch and Tracking Control General (CLTC), the main founding partner of APMT, was described in a press statement issued in Singapore during the APMT's launch in 1995 as "an organization under the Commission of Science, Technology and Industry for National Defense."

White House spokesman Joe Lockhart attributed an inter-agency decision to block the sale to concerns about transferring such technology to a company linked to the People's Liberation Army.

He played down the potential impact on ties, saying: "I don't expect that this decision ... will have a significant impact on the relationship."

In another development, a U.S. federal judge sentenced an international scrap-metal dealer to two years in prison for trying to ship F-117 stealth fighter equipment and sensitive military surplus to China, AP reported from Portland, Oregon.

District Judge Malcolm F. Marsh said he did not believe the claims of George K. Cheng, a Taiwanese national, that he didn't mean to break laws that require a license to ship military scrap overseas.

But Marsh also said that no evidence showed that Cheng, 50, was part of any conspiracy to supply secret military technology to the Chinese military. And he cut the possible sentence by more than half because Cheng was only able to obtain such sensitive equipment because the government failed in its responsibility to dismantle it.

The materials were navigational gyroscopes for the F-117 stealth fighter and F-111 bomber, M-60 and M-48 tank parts and electron tubes from the SLQ-17 anti-missile system.