Finmeccanica CEO for easing rules on China sales

By Jim Wolf

WASHINGTON (Reuters) - The head of Finmeccanica SpA (SIFI.MI: Quote, Profile, Research, Stock Buzz), an Italian aerospace and defense company, said on Wednesday he favored easing export controls on some technology exports to China, a view that could put him at odds with the Bush administration.

"I think we must find a way" to withhold critical technology while easing post-Tiananmen Square controls on "usual" technology with mainly commercial applications, Pier Francesco Guarguaglini, the company's chairman and chief executive, told the Reuters Aerospace and Defense Summit.

"I don't see any real danger because anyhow they will get (the technology)," he added.

President George W. Bush's administration has strongly opposed any step toward lifting a European Union ban on arms exports to China imposed after the bloody 1989 crackdown on pro-democracy protesters at Tiananmen Square.

French President Jacques Chirac has been campaigning to have the embargo lifted.

Guarguaglini said it was better "to control the technology, not the product" -- an apparent reference to holding the line on the most sensitive dual-use technologies with potential military and civilian applications.

Earlier in the day, Guarguaglini told a Hudson Institute conference on transatlantic defense trade that U.S. red tape on technology transfers was delaying "many important programs."

At the session held by the policy research group, he called for improved technology sharing and a "smoothing" of the protectionist buy-America drive led by some U.S. lawmakers.

Robert Trice, senior vice president for business development at Lockheed Martin Corp. (LMT.N: Quote, Profile, Research, Stock Buzz), told the Hudson conference that any EU move to lift the China arms embargo was an "800-pound guerrilla" threatening enhanced transatlantic defense trade.