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China's satellite diplomacy shifts a gear
By Peter J Brown
In late September, China announced that it would build and launch a new
communications satellite for Bolivia in the next three years, and shortly
thereafter, China announced that it would do the same for Laos, although no
timetable was disclosed. Talk of China's satellite project with Laos has been
circulating for over a year. Other countries, including Ecuador, Myanmar and
Vietnam as well as a few in Africa, might soon be added to the list.
"The deals involving Laos and Bolivia are not the first Chinese deals with
developing countries. China had deals with Nigeria and Venezuela respectively
in 2007 and 2008. China has built a better capability to provide satellites and
launching services after its
efforts in developing space technology for half a century," said Professor Ling
Yan, an international law professor at the China University of Political
Science and Law in Beijing. "As a developing country, China is willing to
cooperate with other developing countries and to mutually benefit from the
President Evo Morales of Bolivia had been at the headquarters of the
International Telecommunication Union (ITU) in Geneva just two weeks prior to
China's announcement, to discuss satellite-related matters with ITU
secretary-general Dr Hamadoun Toure. So, this was a signal that Bolivia might
move quickly to initiate a satellite project, although few expected any formal
announcement until next year. The announcement with Bolivia came soon after
Morales met with Chinese President Hu Jintao at the United Nations in New York.
Was the celebration of the 60th anniversary of the founding of the People's
Republic of China (PRC) a factor? This cannot be ruled out. After all, Russia's
decision earlier this month to delay the planned launch of China's first probe
to Mars from late 2009 to 2012 was awkward and unwelcome. Following all of
China's well-publicized, space-related activity in 2008, including China's
first manned space walk, China's satellite launches and other activities in
space had slowed considerably in 2009. As a result, the timing here is ideal
and China no doubt welcomes all of this satellite-related publicity.
David Vaccaro, senior analyst at Maryland-based Futron Corp, said that China is
actively pursuing satellite deals in Southeast Asia and elsewhere for good
reason. "It is certainly consistent with the goals of China's space program,"
said Vaccaro. "China seeks to use space as a tool of diplomacy in neighboring
Southeast Asia and elsewhere. Beyond this, China has long-stated commercial
aspirations in space."
However, China's inconsistent track record to date with communications
satellites cannot be ignored. China is rapidly building a replacement for
Nigeria's Chinese-built NIGCOMSAT-1 after its failure in late 2008, for
example. Launched in May 2007, this was Nigeria's first communications
satellite. (See Nigeria's
Chinese-built satellite goes dark, Asia Times Online, Nov 18, 2008)
China's preference thus far has been to engage in satellite deals announced
only after the completion of closed-door negotiations with foreign governments.
China has avoided the highly competitive commercial marketplace. However,
China's reluctance to participate in an open bidding process may be changing.
For this reason, all eyes are on Vietnam which has announced that it is looking
to acquire its second communications satellite, known as Vinasat-2. China's
primary satellite manufacturer, the China Academy of Space Technology (CAST),
currently features news articles about Vinasat-2 - the Vietnamese have not
announced who will provide Vietnam's second communications satellite - on its
website, according to Vaccaro.
If China is interested in pursuing this deal, it will certainly face what is
likely to be a concerted bid by US satellite builder and defense contractor
Lockheed Martin, which built Vinasat-1, Vietnam's first communications
satellite. There will also be competitive bids by other US and European
satellite manufacturers. As a result, China will have to offer a compelling
deal to win this and any other future satellite contracts, according to
On the other hand, China's generosity is no secret in satellite circles. When
China announced a few weeks ago that it would build Pakistan's new
communications satellite at a projected cost of US$212 million, a $200 million
construction loan from China was part of the transaction. This is the same sum
that the Export-Import Bank of China provided to Nigeria in 2006 for
Both the Nigerian satellite and the newer Chinese-built Venezuelan satellite
known as Venesat-1, which was launched in late 2008, cost well over $200
million. That is the price tag of the satellite alone, and does not include the
amount spent on launch vehicles, launches and ground control facilities which
can easily add about $100 million or more to the total cost.
In effect, China may well be offering satellites to developing countries at
bargain basement prices, however, accurately calculating the exact cost of
these satellite projects is quite difficult because rarely if ever is anything
done out in the open. China also tends to cover all the expenses - from
financing, and the entire space hardware package to launch and operational
support facilities and services and even advanced training of local personnel.
Other satellite vendors are now offering communications satellites which might
be viewed as more affordable as well by governments which are strapped for
cash, and perhaps a bit reluctant to embrace China's economic and foreign
policy agenda. For example, Kazakhstan signed a contract with Moscow-based
Khrunichev Space Center for Kazsat-2, a satellite which is scheduled to replace
Russian-built Kazsat-1 that was lost in mid-2008. It has an estimated price tag
of $115 million contract.
Another satellite manufacturer which has also been making steady progress
selling a line of smaller and more modestly priced communications satellites is
Virginia-based Orbital Sciences Corp which has customers in Singapore, Malaysia
"China in general is using its financial strength as a diplomatic tool
especially for smaller, less developed countries. Often, it is locking up raw
materials or winning large contracts for Chinese industry," said Patrick
French, senior analyst and head of the Singapore Office at research and
consulting firm NSR, LLC. "This is likely related to efforts here. Plus, few
large international satellite operators will risk buying a Chinese satellite
and being tied to a launch in China in the process until things thaw out
between China and the US. It just adds too much risk."
Another good reason for China to pursue these deals in the developing world is
that it simply offers China an opportunity to fine-tune its satellite products
and engage in high tech team-working, while gaining practical experience and
improving overall technical competence.
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