If China sold the finished product, the complete technology, the expertise, or a product that wasn't dual use, then they would be liable for violating the UN embargo and they could very well make themselves an economic or military target for those who are enforcing the UN embargo, namely the US and Britain. China couldn't deny that they knew what Iraq was going to do with the items.
By selling items which have a dual use, however unlikely the 'legal' use is, they have enough deniability to escape being held responsible. Iraq can take full responsibility for using the product- not in the legal way- and the sellers can still make money selling things that are just a little too questionable for an honest company or country to sell.
The radio isotopes could be traced to China.