Wealthy entrepreneurs in China have been barred from Sir Richard Branson's Virgin Galactic space flights over fears they might steal the technology.
Virgin's craft has a rocket engine that could be classified as potential military technology by the US's International Traffic in Arms Regulations.
The regulations, introduced in the Cold War, stipulate that people from countries including China, Iran and North Korea are forbidden to have access to weapons technology.
The ruling will close off the potentially huge market in China, where tycoons are willing to pay the $250,000 ticket price for a space flight, the first of which is due to blast off later this year. Around 600 people worldwide have already put down deposits.
The ruling comes at a time when Britain is actively courting Chinese technological involvement in the nuclear and telecom industries, and in building the new high-speed rail network.
A Virgin Galactic salesman based in Hong Kong said: "We have had calls from people in China but we have to tell them we can't accept them if they only have a Chinese passport.
"We advise them on how they can make themselves eligible for a space tour. For example, they can get another nationality's passport or they can apply for a [US] Green Card."
Some have successfully applied for Hong Kong passports, the salesman added, as the former British colony is exempt from the ban.
Virgin Galactic has been discussing making an exception to the rules, which also forbid it to launch flights outside the US, with US regulators.
The first flight will blast off from New Mexico in the second half of this year, with Branson and his children Holly and Sam on board.