By Rupert Wingfield-Hayes BBC correspondent in Beijing

US Deputy Secretary of State Richard Armitage has welcomed China's announcement of new regulations restricting the sale of missile technology to other countries.

His comments came at the end of a short visit to China during which he also announced a US decision to put a group called the East Turkestan Islamic Movement on America's list of terrorist organisations.

We view this as a positive step and a positive development

Richard Armitage

China says the group is fighting a terror campaign against Beijing's rule in the far-western province of Xinjiang.

It is less than 18 months since the US and China nearly came to blows over the downing of an American spy plane off China's southern coast.

But on Monday the US deputy secretary of state showed no signs of the animosity once felt by the Bush administration towards China's communist rulers.

Lifting the ban?

Instead, Mr Armitage was full of praise for what he called his Chinese friends.

Armitage (l) is building support for the war on terror

In particular, he welcomed China's announcement of new regulations controlling the export of Chinese missile technology.

And he said the US may now be willing to lift the ban on American companies launching satellites from China:

"What we did agree to do is to have our experts get together as soon as possible to not only fully understand the regulations and the enforcement mechanism, but talk about a way forward," he said.

"We view this as a positive step and a positive development and I hope the talks will be upcoming in the very near future and lead to the undoing of some of those licences which have been held up."

Allies

Last September's attacks against the US changed the US-China relationship profoundly.

President Jiang is to meet Bush in October

China is seen as a key ally in President Bush's war on terror. Just how close an ally was made clear by the US decision to put an organisation called the East Turkestan Islamic Movement, or ETIM, on the US list of terrorist organisations:

"After careful study we judged that it was a terrorist group," Mr Armitage said.

"It committed acts of violence against unarmed civilians without any regard for who was hurt."

Up to now no-one - except the Chinese government - has been at all clear about ETIM members are.

Beijing says the group is allied to Osama Bin Laden, and has called on the world to recognise the justice of its fight against Muslim separatism in Xinjiang.

That, it appears, is exactly what the US has now done.