BRITAIN is facing an increasingly acrimonious argument with America over military exports to China after the Communist party pledged yesterday to push through legislation allowing for war with Taiwan.

Washington fears its sailors and pilots could face weapons guided by European technology in a battle over Taiwan, which split from China in 1949 and is a thriving democracy.

One example cited by American analysts is a micro-satellite developed by Surrey University’s commercial arm which will give China increased ability to survey the Taiwan Straits and enhance knowledge that could be used to wage war in space.

The firm, Surrey Satellite Technologies Limited (SSTL), says the micro-satellite, to be launched this year, is for disaster monitoring. But western diplomats in Beijing say it is a classic example of “dual use” equipment that will be exploited for military ends.

Defence specialists at the conservative Heritage Foundation say the satellite employs “technology the Chinese acknowledge will be used in ‘parasitic’ anti-satellite weapons that would attach themselves to larger communications or global positioning satellites and await ground signals to self-destruct”.

Although SSTL is supplying the ministry of science and technology, it is the People’s Liberation Army (PLA) that exercises ultimate authority over China’s drive to acquire space-based surveillance and communications systems.

At the National People’s Congress yesterday, Wen Jiabao, the prime minister, promised Beijing “would never allow secessionist forces . . . to separate Taiwan from China”.

The congress will pass a law that says China can intervene if the island declares independence or becomes a threat to national security.

It will intensify the dispute between London and Washington over British support for plans to lift a European Union embargo on arms sales to Beijing, imposed after the 1989 Tiananmen Square massacre. America is threatening severe restrictions on technology sales to European companies in reprisal.

China’s determination to upgrade its fighting forces was in no doubt yesterday when the congress was told of PLA plans to reduce the army by 200,000 men to devote more of its budget — some £14 billion this year — to improving high-tech weaponry.

Under government guidelines, Britain sells Beijing only “non-lethal” equipment. But study papers written by China’s own defence planners reveal their real priority is not bullets, but software.

Their ambition is to rival the US Seventh Fleet in the sophisticated guidance and radar systems that would determine the outcome of a war to “liberate” Taiwan fought chiefly in the air and at sea. That makes the British balancing act increasingly precarious.

London has already been criticised in Washington for allowing Rolls-Royce to supply Spey jet engines for the Chinese navy’s Xian JH-7 fighter-bomber.

Rolls-Royce says the engines represent 1960s technology. However, defence attachés visiting an air show in the southern city of Zhuhai noted that the Chinese had used the engines to upgrade the JH-7 into a weapons platform for a long-range missile.

US experts believe the JH-7 represents a new offensive strike capability for the Chinese navy that would undoubtedly be deployed against the Seventh Fleet.

In this climate, US diplomats and military personnel in the region feel distinctly lukewarm about closer military ties between Britain and China.

Although France, Italy and Germany all crave the opportunity to sell weapons to Beijing, the Americans have gone out of their way to brief high-ranking British officials in detail about the risk of a limited conflict between the US and China.

Chinese leaders have made their determination to resist any Taiwanese move to declare independence into a patriotic totem.

The Americans have previously indicated that if Taiwan showed the will to fight “reunification” with China, they would be prepared to launch operations ranging from the destruction of missile sites in the coastal province of Fujian to attacks on Chinese cities.

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