The U.S. also fears that Israel's close partnership and resulting knowledge of sophisticated military technology is propelling still-secret American weapons into the wrong hands. The U.S. Arms Export Control Act (AECA) specifically states that no country may sell U.S. "defense articles or service" to a third country (known as unauthorized retransfer) without U.S. approval. From 1975 to 1995, 17 reports went to Congress concerning so-called end-use violations, seven of which pertained to Israel. Yet the U.S. has continually backed down from taking action against Israel, primarily due to enormous pressure from Israel's well-organized congressional lobby. Also, according to Dov Zakheim, former deputy undersecretary of defense under Reagan, "They have never been caught red-handed. It is reasonably safe to say that Israel is not foolish enough to transfer stuff that can be found out."
Yes one sale may not have gone through, but pictures of the missiles on the Chinese plane that collided with our EP3 proved Israel did sell other items to China.
Half the family is in the group that controls the US and half the family in the group that sells the US to the Chinese. And how we fight over the white fish. It's not a pretty sight.
The sale of those missiles was approved by the US back during the Cold War. The US has sold plenty of military hardware to China too.