1) Military concerns
2) Economic concerns
Military
On the military front, Washington has expressed concern that a modernizing China is increasingly able to design, build and launch space based hardware with the potential to improve Beijing ability to:
1) Coordination its military forces
2) Gather long ranged intelligence about opposing forces
3) Impede America's own capabilities by jamming communications or destroying US military Satellite
Thus making any future Sino-American conflict more difficult to wage for the US and more costly for Washington in terms of manpower and dollars.
Equally, Washington has expressed concern about the close relationship between China's military and civilian satellite industries. Particularly that experience and capital generate through the development and launching of civilian satellites could easily be channeled towards military satellite programs. Allowing Beijing to develop increasingly sophisticated technologies under civilian auspices which can rapidly be put to military use - so-called "Duel Use" technology - while at the same time presenting elements of military R&D budget as being civilian in nature so as to avoid international oversight.
Economics
Though a secondary issue, and one more reserved for the future that the present day, elements within Washington have also expressed concern over the potential economic impact that Chinese Satellite might have on US economic interests. Such fears are two fold.
1) That China will deploy communications and Earth observation Satellite domestically, using them to improve the efficiency of its agricultural, industrial, and service industries. Thus allowing China's economy to grow faster and to compete with the Ameriica's more directly
2) That every Satellite that Beijing builds, and every dollar that it earns in doing so, will allow China to develop increasingly sophisticated and economical Satellites for export. Eventually enabling it to reach the stage where it will be able to compete with the US on the open market. Forcing US manufacturers to cut their margins in order to stay competitive, and attracting international investment away from the US and towards China. Thus impacting upon the US Satellite sector in much the same way that is has already happened on the manufacturing sector.
Soft Power Politics
For the most part, the fact that Washington has spent so much time and effort worrying about the military and economic threat posed by China's satellite industry says as much Washington's way of thinking as it does about anything else. However, there is also a third potential threat that officials in Washington are now began to wake up to. One which may have more impact on the balance of power in the post Cold War, post 9/11, world than either of the above.
According to the latest reports, Beijing is now actively seeking to market satellite in the developing world. Selling, or leasing, space hardware to countries who aspire to the benefits brought by orbital real-estate, but who lack both the technical ability and the wealth necessary to do so acquire them independently.
"[China] want to play a leadership role for developing countries that want to get into space." - Joan Johnson-Freese, Chairperson, Department of National Security Studies, US Naval War College
At first, this might not seem like a big deal for Washington. After all, there is little profit to be made selling Satellite to people who can barely afford basic amenities, and a third world country would need a first world military to go with its satellites before it could pose a tactical threat to US interests. However, this is where so-called "Soft Power" comes in.
By offering to provide space real-estate to the developing world, on favorable terms, China can pick up influence and political good will that could be translated into virtually anything in the future, from votes in the UN and trade advantages, to favorable access to natural resources/
"It's just such a win-win for them. They are making political connections, it helps them with oil deals and they bring in hard currency to feed back into their own program to make them even more commercially competitive." - Joan Johnson-Freese
Although often individually economically small or without influence, developing countries make up a significant portion of the world's population and are the source of a significant portion of its natural resources, too, together can have a large impact on world affair. Thus making them important friends for China, which is seeking international recognition and credibility, as well as the natural resources to fuel its growing economy.
Equally, with leverage in the developing world, China can rally international support for it's own domestic policies and programs. Making it impossible for the West to criticize China, or to put pressure on it over such things as it domestic human rights record or its trade/economic policies, without itself facing a backlash from China's developing world allies. Thus weakening the West position by forcing it onto the defensive on many issues.
A Sign of things to come?
A recent example of this, and what the future may hold, was seen last week when China launched the $US311 Million Nigcomsat-1, for Nigeria, an oil rich country that maintains a problematic relationship with the Wests, but which has increasingly been looking to China for assistance in developing its infrastructure and harvesting its natural resources.
"What we have achieved in this project is a masterpiece of Sino-African relations - T Ahmed Rufai, Chief Executive, Nigerian Communication Satellite Ltd.
While a small fish in a large pond, the construction of Nigcomsat-1 is highly notable in that China managed to pulled the contract out from under the noses of almost 2 dozen competing bids. Most from significantly more developed states, including America, Israeli, Russian, and the EU. With China offering a level of service that the other nations either couldn't or wouldn't provide.
Russian and Israeli manufacturers were forced to pull out of the bidding process because they couldn't guarantee to provide coverage for the whole of Nigeria across the Ku, C, L and Ka bands from the required orbital position, as specified in the contract. US companies faced difficulties because of Washington's strict technology export laws, which could potentially have impede their ability to fulfill the Nigeria's criteria for an all inclusive service, and there were also concerned over the profitability of the contract and Nigeria's ability to pay for it an follow up work. EU groups were similarly concerned over long term financial issues.
"Business ventures with Nigeria have been difficult, to say the least" - Roger Rusch, President, TelAstra Inc, California
Chinese engineers managed to resolve issues over band provisions using technological solutions, while Beijing overcame finance/profitability concerns by providing a finance package along side a contract bid. China also faced no challenges in regards to technology exports, as American companies did, due to China's "No strings, no judgment" policy; under which Beijing does not require foreign countries to meet domestic standards before exporting items of high technology or cost to them.
Foreign attitudes were also said to come into play, and it was reported that representatives of one of company declined to work to Nigeria's specification; considering it to be too advanced a program, and instead offered to build them a satellite built to their own design. Causing much bad feelings among Nigeria officials, who saw the offer as being an insult.
"A senior representative of this company came to visit us and was arrogantly telling us what we needed, and why we didn't want what our [Request for Proposal] said. I told him I was expecting him to ask two questions he didn't ask, and I posed these questions to him myself: Do you see people living in trees here? Do you see lions or hyenas running in the streets? This company was not taking us seriously." - Robert Boroffice, Director-General, Nigerian National Space Research Development Agency (NASRDA)
At present, Beijing has is contracted to build approximately 30 foreign satellites, including ones for the oil-rich, US-hostile, states of Iran and Venezuela, with whom it has been cultivating relations for some time. As well for Bangladesh, Indonesia, Mongolia, Pakistan, Peru and Thailand.
Other Concerns
In addition to concerns that Beijing might be using space real-estate exports to "win friends and influence people", the prospect of China selling satellites to the developing world also raises other concerns for the US. Many of which revolve around China's "No strings, no judgment" policy, which allows it to deal with states the US wouldn't, and in situations which could cause many problems for the US.
For example, the sale of communications satellites to countries with different world views - such as Islamic Middle Eastern state or socialist Latin American states - could greatly expand said states ability to broadcast their ideologies to a global audience, or to communicate with sympathetic audiences independently of US infrastructure. The sale Earth watching and communications satellites could allow developing countries to develop faster, and to make better use of their natural resource. Making them more self reliant and more able to compete on the world market, and less reliant on Western countries for technology, but without them first having to reform their social, political or economic systems. Equally, China may also export "Dual Use" satellite technology to countries that the US considers to be unsuitable recipient, who might put them to uses that impede America's ability to project force overseas. For example, an Earth watching satellite designed for civilian use could be acquired by a nation such as Iran and used to target missiles, or to spot approaching US forces in the event of a confrontation.
Summing Up
While arguments over policy and threat go on in Washington, China watchers have noted that, regardless of whether China's satellite industry civilian in nature, military, or a mixture of both, its eventual emergence as an export market will be a loose loose situation for Washington.
Whether America is loosing votes at the UN because of the soft power in the developing; because of subsidized satellite deals, loosing loosing oil and ore deals in the third world; because China has the inside track with regional government, loosing contracts in Africa, Asia and Europe; because governments have can find a cheaper alternative and a more amenable trading partner in China, or loosing aircraft carriers in the pacific; because China's military satellites give have narrowed the technological divide, Chinese satellites seem destined to make a difference to the Sino-American dynamic.
Nigcomsat-1
Nigcomsat-1, is a quad-band geostationary communications satellite designed to provide broadcasting, telephony and broadband internet access. The satellite's launch is predicted to save Nigeria over $US600 Million in telephony costs, and to cut into the $US100 Million that Nigerians currently spend leasing services from foreign owned satellites.
"[Nigcomsat-1] gives you bandwidth to enable you to communicate from point A to point B, from rural Africa to urban cities" - Dr Bashir Gwandu, Director, Nigeria Communications Commission
According to Chinese and Nigerian sources, the satellite was constructed in a shorter time than the average for a Western country, and to a lower budget.
"The bid from China was judged the most economically advantageous tender and thus won the bid" - T. Ahmed Rufai
In addition to constructing and launching the satellite, China was also contracted to build two ground monitoring stations for NASRDA, and to train 98 Nigerian engineers to monitor and maintain the satellite's systems and services.
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