China's People's Liberation Army (PLA) soldiers line up during rehearsal on eve of parade to be staged in run-up to 10th anniversary of the city's return to Chinese rule, 25 Jun 2007

A Washington-based research group says a new U.S. policy on technology exports to China should be suspended because it threatens national security.

The group - called the Wisconsin Project on Nuclear Arms Control - made the claim in a report released Wednesday. The report criticizes a change last October to U.S. rules on the export of sensitive technologies to China.

The policy makes it easier for Chinese firms to receive such technology if the U.S. government says they are trusted to use it for civilian and not military purposes.

But the report says two firms benefitting from the policy have ties to the Chinese military, which could use the technology to modernize.

The group also says one of the firms is linked to a company sanctioned by the U.S. State Department for allegedly selling banned weapons to Iran or Syria.

A U.S. official involved in implementing the new measures says the administration's overall policy has been to tighten, not loosen export controls to China.

The official, Undersecretary of Commerce Mario Mancuso, defended the policy, but did not respond directly to the report's findings.

When asked Wednesday about the report, White House Press Secretary Dana Perino said she was unaware of it.

U.S. companies must normally obtain a government license to before exporting so-called "dual use" technology to China.

China has called for the lifting of U.S. export controls, which it says are part of the reason for the two countries' huge trade imbalance.

Some information for this report was provided by Reuters.