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.