"The United States' use of its domestic laws and national policy to issue sanctions towards Chinese companies is unreasonable and should be withdrawn," an official statement from the Ministry of Foreign Affairs said.

The statement also said that as a signatory to the Chemical Weapons Treaty, China "opposes countries that develop chemical weapons and does not aid countries to develop their chemical weapons . . . China prohibits the export of sensitive chemical products and their related production technology and equipment."

The sanctions, announced on Thursday in Washington by the US State Department's Bureau of Non-proliferation, accuse two firms Chinese firms and one individual of violating the Iran Non-Proliferation Act of 2000.

US State Department spokesman Richard Boucher said: "The penalties were imposed for the transfer to Iran of equipment and technology that is used for the manufacture of chemical and biological weapons."

However, Boucher did not offered any detail on what the Chinese entities sold to Iran.

The Washington Times said the sanctions followed a draft CIA report that said Iran had sought technology from China to develop its biological and chemical weapons capabilities.

(China Daily January 26, 2002)