China has denied selling weapons to Muammar Qaddafi's regime in violation of a UN embargo, but admits that Libyan officials did meet with Chinese arms manufacturers over the possibility of a sale. The denial comes in response to a recently discovered Libyan document that details a possible arms deal and could impair relations between China and Libya's transitional government.

Chinese spokeswoman Jiang Yu said Monday that China had not sold any weapons to Mr. Qaddafi's government directly or indirectly, although discussions of such sales did take place without government knowledge, reports Bloomberg News.

“The Qaddafi regime sent people to China to make contact with certain individuals of relevant Chinese companies in July without knowledge of government departments,” Ms. Yu said. “Chinese companies have not signed any military trade contracts with Libya, let alone sold arms to Libya.”

The documents that prompted China's statement, first published and reported on by the Canadian newspaper The Globe and Mail, states that Libyan officials met with representatives of three Chinese arms manufacturers – China North Industries Corp. (Norinco); the China National Precision Machinery Import & Export Corp. (CPMIC); and China XinXing Import & Export Corp. – in July. The documents were found in the garbage in Tripoli's Bab Akkarah neighborhood, where several Qaddafi loyalists lived, and were printed on the letterhead of Qaddafi's government procurement agency.

The hosts thanked the Libyans for their discretion, emphasized the need for confidentiality, and recommended delivery via third parties. “The companies suggest that they make the contracts with either Algeria or South Africa, because those countries previously worked with China,” the memo says. The Chinese companies also noted that many of the items the Libyan delegation requested were already held in the arsenals of the Algerian military, and could be transported immediately across the border; the Chinese said they could replenish the Algerian stocks afterward. The memo also indicated that Algeria had not yet consented to such an arrangement, and proposed further talks at the branch offices of the Chinese companies in Algiers.

An appendice to the document details the specific weapons the firms offered to sell, including truck-mounted rocket launchers, anti-tank missiles, and shoulder-mounted ground-to-air missiles – missiles that The Globe and Mail notes could bring down military aircraft.

The Globe and Mail adds that Omar Hariri, chief of Libya's National Transitional Council’s military committee, says the sale would explain the brand-new weapons that rebel forces encountered on the battlefield. “I’m almost certain that these guns arrived and were used against our people,” Mr. Hariri said.

Rebel military spokesman Abdulrahman Busin told The New York Times on Sunday that the NTC would seek accountability for the possible sales through international channels, and noted that any foreign government that violated the sanctions would find diminished business prospects in Libya. He also warned that The Globe and Mail's documents were not the only ones showing Chinese violations.

“We have hard evidence of deals going on between China and Qaddafi, and we have all the documents to prove it,” he said, adding that the rebels have other evidence, including documents and weapons found on the battlefield, showing that arms were supplied illegally to Colonel Qaddafi’s forces by numerous other governments or companies. “I can think of at least 10 off the top of my head,” he said.

Both The Globe and Mail and the Times noted that although some Western governments supplied weapons to rebels, the UN sanctions specifically barred arms sales only to Qaddafi's government.

The Associated Press notes that even if meetings between Qaddafi officials and Chinese firms were as far as the possible arms deal went, the fact they occurred still damages China's relations with Libya's new government. China, which has billions of dollars worth of investments in Libya, has yet to recognize the rebels and now appears to have been playing both sides of the conflict. And in a commentary for Middle East Online, James M. Dorsey writes that China has scored "near-fatal own goals" in the competition – particularly with Russia – to establish business ties with oil-rich Libya's new government. Russia last week recognized the rebel government and has invited it to send a delegate to Moscow.

"If Libya is anything to go by, Russia is quicker on its feet to read the writing on the wall," Mr. Dorsey writes. "China’s failure to do so will be at its own peril."