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China denies role in Iraq

BAGHDAD (CNN) -- China's embassy in Iraq is categorically denying Pentagon claims that Chinese workers are upgrading Iraq's military telecommunications system, calling the allegations "fabricated and ridiculious."

The Chinese commercial counselor in Baghdad, Huang Bing Song, told CNN Wednesday he has now checked into the allegations. He says there are no Chinese firms or technicians working on Iraq's military telecommunications.

"The purpose of these rumors is to divert attention from the United States to China," he said.

He said China has signed contracts with Iraq for about $55 million in telecommunications projects but none have been implemented.

Blocked at U.N. committee

The contracts were approved in principle by the United Nations but have been blocked by United States and British representatives at the U.N. Sanctions Committee.

Iraq has said, and the U.N. has agreed, that it needs to repair its badly damaged telephone system to provide services like ambulances and coordinate medicine distribution.

But U.S. and British delegates at the U.N. sanctions committee have placed on hold for about a year contracts from China and other countries to supply telecommunications equipments such as fiber-optic cables and microwave radio systems.

The holds often give no specific reason but reflect U.S. fears that the items could be used for military as well as civilian purposes.

Approved and imported

Fiber-optic cables have previously been approved by the sanctions committee and imported for Iraq's electrical and medical sectors.

Iraq is not prohibited from developing conventional weapons but it is barred from importing anything other than humanitarian goods under the decade-long U.N. sanctions.

"Do you think we would do that?" a Chinese embassy official asked CNN. "We are complying with U.N. resolutions."

He said most of China's telecommunications contracts had been held up or blocked by the U.N. sanctions committee.

The U.S. places the majority of holds on Iraqi contracts, usually citing concerns that the equipment could be used for military purposes as well as humanitarian ones. The embassy official said work had not yet started on any of the telecommunications projects previously approved by the U.N.

He said however that the embassy did not know of all the Chinese workers or firms in Iraq. China, a security council member which calls for an end to sanctions, receives a large share of contracts by Iraq under the U.N.'s oil-for-food program.

The U.N. said there are currently more than 200 million dollars worth of telecommunications contracts on hold at the sanctions committee, most of the holds placed by the United States

Iraq's telecommunications system was badly damaged by the Gulf War. The U.N. says Iraq needs to rebuild it to maintain communications with hospitals and for other humanitarian services.

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4:30pm ET, 4/16

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