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    China Business
     Mar 31, 2007
Page 2 of 3
China draws Africa into its orbit
By Bright B Simons, Evans Lartey and Franklin Cudjoe

weapons-of-mass-destruction efforts by supplying precision equipment, and is said to be subject to a probe by the US Federal Bureau of Investigation.

Geopolitics is thus one reason China cannot hope to profit as quickly as it would want to from America's misfortunes. The other issue, as is the case in many other areas, is to do with national competence in other segments allied to the hard manufacturing



and launching of satellites: for instance, financing, legal, and assorted project risk management. The British insurance industry, for example, according to Ryan Zelnio, dominates the global satellite underwriting business.

That is why big, complex, multi-sector contracts like Nigcomsat-1 are just the sort of projects Chinese aerospace contractors will kill for. To get them, however, China will have to take on Russia, which means the cost of engaging in regions where military considerations are high on the space agenda can be very high, since Russia is formidable when it comes to space-military integration. Competition with Russia for Iranian contracts, to cite an example, will always prove tough.

Egypt and Saudi Arabia, key rivals of Iran, have also been slow in moving into the Chinese space orbit. The two countries have commissioned a number of mini-satellites from Italy that they intend to launch from Ukrainian sites. Israeli intelligence officers believe that Egypt's Egyptsat-1 satellite, whose launch into orbit has been dogged by delays but is expected to happen early next year, is a spy satellite. It was built by Ukraine's Yuzhnoe Design Bureau and will launch from the Baikonur cosmodrome, a facility Russia rents from Kazakhstan.

China will continue to play second fiddle to Russia only as long as it has to compete for projects with complex political and military motivations. Russian firms, such as Energomash, have in the past been successful in securing Iranian contracts only after agreeing to extensive technology transfers, and presumably China must have agreed to do the same in recent commercial agreements to send Iranian payloads into space.

However, as the Chinese government's white paper "China's Space Activities in 2006" reveals, China is aiming for "world-class large space corporations to provide a market-based mechanism of development".

Diversification away from politically driven enterprises toward broader commercial activities is therefore more in synch with China's professed vision. This is clearly the inspiration underlying the current phase of the country's development in the space field. In fact, since 1985, when it entered the global commercial satellite launch market, the broad principle that has guided the country has been to allow a relatively independent, strictly market-oriented aerospace sector to develop to parallel and perhaps subsidize more military and ideologically propelled space segments.

This accounts for the reason that, despite the heavy rhetorical emphasis on military applications by some Communist Party officials, 71% of all the satellites developed and launched by China have been telecommunication platforms or remote-sensing systems, many of which have limited defense applicability.

It is true that all space-exploration programs have so far been solely financed by Beijing, but even here efforts are accelerating to determine where commercial crossovers can allow private sector participation. Increasingly, universities, particularly elite ones like Tsinghua, are playing a crucial role in the research and development efforts underpinning ongoing progress. And that progress has been considerable. China has constructed many, many terrestrial hubs, of various sizes, to relay signals from its telecommunication satellites. The result is a spectrum of more than 27,000 international telephone channels providing coverage of at least 180 countries, meaning nearly every nation in the world.

The industrial complex at the base of this growth continues to expand at a remarkable pace. One company, China Jiangnan Space Industry Corp, a subsidiary of China Aerospace Science and Industry Corp (CASIC), which produces GPS devices and missiles among other advanced high-tech products, alone employs 30,000 personnel.

James Oberg, an independent aerospace operations consultant, in testimony to a US congressional subcommittee, debunked some widely held opinions about China's space program, notably the perception that recent Chinese space platforms are merely carbon copies of Russian and US ones. He nevertheless conceded that a significant proportion of China's technical output in this area comprises exact duplicates of foreign designs.

This can be put into some sort of perspective by recalling that the US, for instance, spends as much as 15 times what China does. But the experiences of such countries as Israel and even India, which runs the world's largest constellation of remote-sensing satellites, using even fewer resources to achieve impressive gains, make a strong case for China to persist in the current path of intensifying pure market-based commercialization.

China has become known for price effectiveness, and this is something it can leverage in the cost-conscious developing world. India sees itself as possessing the same advantage and is progressing quite steadily toward the capacity to launch satellite payloads above 3 tons, bringing it closer to the scale of modern telecom satellites. So Chinese cost effectiveness must be coupled to economies of scale, and thus to positive cost-quality ratios to remain a relative advantage. This may have something to do with Xinhua's announcement last month that China plans soon to unveil a new satellite-launching center, the country's fourth, at Wenchang in its southernmost island province of Hainan. Because of its low-latitude location, the new center will offer very high-energy payload efficiency, helping to keep costs low for clients.

Meanwhile, extensive upgrades are being made to existing launching sites such as Xichang to ensure continuing commercial competitiveness. Since wide-ranging modernization in 1993, Xichang has been at the center of China's space commercialization drive. Nigeria's Nigcomsat-1 satellite will be launched by a Long March 3B carrier rocket from Xichang.

The Africa factor
Nigeria's approach provides one window for looking at the unfolding situation in Africa. Here, what is evident is a classic switch from the West to China in search of putative national goals. Nigeria has had a space cooperation framework of a tentative sort with the US going as far back as 1958, when the Joint Propulsion Laboratory (which the Chinese visionary Hsue-Shen Tsien help found) brought mobile radio tracking stations into 

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