BAE backs US over Chinese arms ban

BRITAIN'S biggest defence company, BAE Systems, is siding with the Americans rather than its own government by refusing to export arms to China.

Deputy Prime Minister John Prescott has called for the lifting of the arms embargo imposed after the Tiananmen Square protests in 1989. But BAE, fearful that the Americans would retaliate by banning exports of vital hightechnology components to Europe, has failed to back him.

The company, majority owned by US shareholders and rapidly building up its interests across the Atlantic, is America's sixth-biggest defence company.

BAE said: 'Our interests are their [the Americans] interests.'

A spokesman added that while the company had a small defence business in China, the US market was worth billions of pounds. 'You work it out. We support the armed forces of the UK and the US and we will not do anything that harms the long-term interests of these countries.'

BAE recently announced it was buying United Defense Industries - makers of the Bradley tank - for £2.15bn, but the takeover has yet to be approved by Washington.

BAE's pro-American line comes as Europe considers lifting its arms embargo to China - a move that has led to US threats to halt exports of vital technology to the Continent.

Washington is worried that sophisticated European weaponry could be used by the Chinese against American troops in the event of the US coming to the aid of Taiwan if it was attacked by China.