June 16 (Bloomberg) -- The U.S. Commerce Department issued new regulations designed to limit the sale of civilian high- technology items that might benefit China's military.

The rules, effective June 19, list 31 new items -- ranging from aircraft to underwater cameras -- that would require a license from the Commerce Department to be sold to China. The licensing process typically discourages exports. Before the regulations were published, China's Ambassador Zhou Wenzhong said they would restrict exports of U.S. products to China.

The Commerce Department also established a new program that would allow sales to companies certified not to have links to the Chinese military.

The regulations ``will make it easier for U.S. companies to sell to pre-screened civilian customers in China while at the same time denying access to U.S. technology that would contribute to China's military,'' Commerce Secretary Carlos Gutierrez said in a statement yesterday.

In recent weeks representatives of software, aerospace and other U.S. businesses told U.S. Treasury officials that the rules, in the works for two years, may backfire against U.S. exporters and inflame relations with China.

China has long said that current restrictions on U.S. technology exports are a main reason for the record trade gap between the two countries. Zhou said in an interview on June 11 that the U.S. has lost its share of technology exports to China over the past six years, and he blamed the export-control regulations already in place for the drop. New rules would further disadvantage American exporters, he added.

``Protectionist sentiment in Washington is clearly rising,'' said Glenn Maguire, chief Asia economist at Societe Generale SA in Hong Kong. ``You have this consistent legislative approach from the U.S. which is quite counterproductive and in fact quite detrimental to their stated goal of working to narrow that imbalance.''

Military Development

At issue are changes to export-control regulations aimed at preventing China from obtaining civilian technology that might help its military development. The U.S. Defense Department is concerned that China is exploiting access to U.S. technology and using Chinese nationals employed at American companies to help develop its military capacity.

The U.S. Commerce Department floated the idea two years ago of new restrictions on exports of everything from lithography equipment to digital-radio receivers to radar technology. A year ago, it proposed scaled-back rules aimed at 46 items, and it has now further pared the list as it prepares to issue its final regulations.

The new measure was announced amid growing trade tensions between the two countries stemming from concerns of food safety. China's quality supervision administration last week called for increased testing and quarantine of U.S. food exports. Scandals involving poisonous pet food and toothpaste and contaminated fish linked to Chinese suppliers have prompted some U.S. lawmakers to call for a total ban on food imports from China.

``This comes at a time when there's fairly high propensity for retaliatory measures,'' Maguire said. ``It's an unfortunate time for the U.S. to be requiring extra export licenses.''

China's trade surplus rose a bigger-than-estimated 73 percent in May from a year earlier, after surging to a record $232.5 billion in 2006. China has said the U.S. could begin to narrow the gap by allowing American companies to export more of the costly high-tech products.

U.S. business groups, led by the Washington-based National Foreign Trade Council, have argued that they will be unfairly hurt because their competitors in Japan or Europe wouldn't be governed by the new restrictions. They say the rules would require companies to monitor any resales of their products -- or items that contain components they made -- that might go to the Chinese military.

Items subject to the new controls include aircraft and aircraft engines, avionics and navigation systems, lasers, depleted uranium, underwater cameras and propulsion systems and some telecommunications equipment for space communications or air defense.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

Last Updated: June 16, 2007 01:44 EDT