China angered by U.S. sanctions

Concern about Iran developing weapons of mass destruction has prompted the sanctions

WASHINGTON (CNN) -- China has demanded the U.S. reverse its decision to impose what Beijing says are "unjustified" sanctions against Chinese companies accused of arms or technology sales to Iran.

The two-year sanctions will be imposed on ten individuals or companies accused of arms or technology sales to Iran -- all but one is believed to be Chinese.

The U.S. State Department announced the sanctions last week, stating the decision was made July 9 to impose them under the Iran-Iraq Arms Non-Proliferation Act of 1999, designed to stop Iran and Iraq from developing weapons of mass destruction.

The spokesman for the Chinese embassy in Washington, Xie Feng, said on Monday that it was "groundless" for the United States to accuse China and demanded the sanctions be lifted.

"The Chinese side has been informed about the so called sanctions against Chinese corporations. And our response is we strongly oppose the so called U.S. sanctions against Chinese corporations based on U.S.A domestic laws," he said.

"The Chinese position on non-proliferation has been clear and consistent, proliferation of weapons of mass destruction is not in China's interest. We opposed proliferation of weapons of mass destruction."

Frustration

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The response comes amid increasing frustration by the Bush administration over Beijing's inability or unwillingness to crack down on Chinese companies.

"It is an ongoing issue, it's an issue that we raise when we talk to the Chinese," State Department Spokesman Richard Boucher said on Friday.

"Non-proliferation is one of the most important issues on our agenda."

Eight of the entities will also be sanctioned for a year under the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991 because the technology transfers contributed to Iran's chemical weapons program, Boucher said.

The Associated Press reports the sales, from nine Chinese firms and one from India, occurred between September 2000 and October 2001.

The penalties prohibit all departments and agencies of the U.S. government from purchasing goods, technology, or services from the companies and individuals. In addition, the U.S. government cannot provide assistance to the entities, which will also be ineligible to participate in any U.S. assistance program.

Sanctions add to list

This is the fourth time the Bush administration has sanctioned Chinese companies for export-control violations.

In May, Armenian, Chinese and Moldovan companies were sanctioned for transferring to Iran equipment and technology prohibited under the Iran Non-Proliferation Act of 2000.

In January, the State Department barred trade for two years with Liyang Chemical Equipment, China Machinery and Electric Equipment Import and Export Company for violating the Iran Non-Proliferation Act by transferring equipment and technology to Iran which could be used to make chemical weapons.

Sanctions were also imposed last September on Chinese arms manufacturers for selling missile technology to Pakistan, in violation of a 2000 arms-control agreement between the United States and China not to proliferate weapons to Islamabad.

-- CNN State Department Correspondent Andrea Koppel and Producer Elise Labott contributed to this report