Posted on 12/10/2001 12:56:38 AM PST by Cincinatus' Wife
There also were accusations -- adamantly denied -- that Loral's chairman influenced a Clinton administration licensing decision with a hefty donation to the Democratic National Committee. License approval eventually was shifted from the Commerce Department to the more restrictive State Department.
The Clinton White House announced in November 2000 that it would resume processing export licenses and extend China's launch privileges through 2001 after Beijing agreed to a missile nonproliferation pact. But the Bush administration says outstanding issues remain in implementing the nonproliferation agreement. New satellite export licenses remain on hold. Sen. Jesse Helms, R-N.C., and three other lawmakers urged President Bush in July not to resume licensing under any condition.
BEIJING -- This isn't exactly what Chairman Mao had in mind.
Here in a sparkling showroom celebrating the achievements of Chinese rocket builders, representatives of the Great Wall Industry Corp. are showing off their wares to an international delegation from Iran, Thailand and Pakistan.
The pitch is clear: China has rockets for sale -- cheap. Beijing soon could be beating Western capitalists at their own game by grabbing a larger share of the lucrative yet cutthroat commercial-launch market. And China's efforts to land more of this business could directly impact jobs and profits in the United States.
Not so long ago, foreign visitors to this once-secret industrial complex in Beijing's southern suburbs would have been feared as potential spies. Today, the guests here at the China Academy of Launch Vehicle Technology are welcomed as potential customers.
In a building across the street from the sprawling aerospace campus's headquarters, the foreign delegation gathers around a conference table to watch a slick promotional video singing the praises of China's Long March rocket fleet. Glossy marketing brochures are distributed as the video's narrator breathlessly gushes in English about the rockets' high reliability.
When the video ends, a tour guide shows the group full-scale samples of the Long March line. The visitors are clearly impressed. The entire event is an investment for the future -- one China is counting on to pay big dividends in coming years. Foreign capital is critical to funding a variety of Chinese military and civil space projects. This is Beijing's plan for getting it.
Necessity has driven China's communist leadership to embrace once-alien concepts such as marketing and customer service. They are proving fast learners.
Their goal is a simple one shared by profit seekers everywhere.
"We want to capture as much of the market as possible," said Chen Xing Quan, a rocket scientist at the Shanghai facility that designs systems for the Long March line.
As Long March reliability grows and prices shrink, Great Wall Industry Corp. is poised to do just that. But its gains almost certainly will come at the expense of the Western launch industry, including American companies such as Boeing and Lockheed Martin that operate at Cape Canaveral. U.S. government missions -- mainly military and science satellites -- usually are off-limits to foreign companies. But more than a third of all worldwide launches are commercial missions that are up for grabs.
Revenue from commercial launches averages more than $2 billion annually. According to the Federal Aviation Administration, the United States conducted 40 percent of the world's commercial missions from 1996 to 2000, Europe 27 percent, Russia 23 percent and China 6 percent. Forecasters predict an average of 30 commercial launches per year in the next decade.
Business plans are so tight that the loss of just two or three annual launches to Great Wall could hurt American companies. To complicate matters, the launch industry already is reeling worldwide.
There are too many rockets and too few satellites needing a ride to space. An expected boom never materialized as several satellite ventures went bust and spacecraft in orbit began lasting longer. In fact, the Teal Group, a Virginia-based aerospace-consulting firm, found a 27 percent drop in launches for the first half of 2001 compared with the same period for 2000. It's the sharpest drop in five years.
Spectacular failures
China's early forays into the commercial space market didn't exactly strike fear in the hearts of its competitors.
Great Wall first gained a toehold in the mid-1980s because of a U.S. rocket shortage after the 1986 Challenger accident. American booster assembly lines had become largely idle as satellite launches shifted to NASA's space shuttle. When the shuttle fleet was grounded, China and Europe moved to fill the vacuum.
China's first commercial mission -- launch of a communications satellite for a Hong Kong company -- was a success in April 1990. Things went smoothly for the next few flights. Then a series of catastrophes struck that the Chinese space industry still hasn't fully lived down.
In December 1992, an Australian television satellite mounted atop an American upper stage exploded inside a Long March nose cone and arrived in orbit as smoldering debris. The Chinese blamed the American rocket stage. The Americans blamed the Chinese rocket.
A more tragic failure occurred two years later when a communications satellite was lost aboard a similar Long March rocket with the same U.S.-built upper stage. This time, the rocket blew up shortly after liftoff from the Xichang Satellite Launch Center, raining debris on an inhabited area downrange. Official accounts put the human carnage at six people killed and 23 injured. Unofficial accounts put the death toll at more than two dozen.
An even deadlier disaster happened at Xichang on Feb. 14, 1996. The maiden flight of the Long March 3B rocket carrying a $60 million U.S. Intelsat communications satellite came to be known as "the St. Valentine's Day Massacre" among the launch's Western insurers.
Trouble began two seconds after liftoff when the rocket's navigation system failed and the booster veered to the side. It erupted in a massive explosion 20 seconds later. Chunks of rocket showered the area. Official accounts listed two people killed and 70 others injured. Unofficial accounts put the number of dead at more than 50.
The problems didn't end there. Six months later, the upper stage of a Long March 3 shut down early and marooned a Chinese television satellite in a useless orbit. Commercial missions aboard Long March rockets became almost uninsurable. Premiums soared to about 30 percent of the amount insured, about double the going rate at the time for Western launchers.
"We learned lessons from those incidents," said Luan Enjie, administrator of the China National Space Administration. "At that time, we realized that quality is the life of a space program."
Back on track
Since the 1996 upper-stage problem, however, the Long March fleet has launched 28 consecutive times without a failure. Chinese officials attribute the stunning turnaround to reforms implemented after a top-to-bottom review of the program. There's more emphasis on quality control. Manufacturing processes have been modernized. Redundancy has been added to critical rocket systems. And more attention is being paid to selection and training of program managers.
A congressional panel chaired by U.S. Rep. Christopher Cox, R-Calif., attributed the turnaround to something else. Government investigators claimed the illegal transfer of technology from U.S. satellite makers helped Chinese engineers iron critical bugs out of their systems.
Loral Space & Communications and Hughes Electronics Corp. built satellites lost aboard Chinese rockets. Both U.S. companies were accused of violating export-control laws by sharing the findings of their internal accident investigations with China.
"Many of these technologies can be dual purpose -- used for both military and civil purposes," said Charles Vick, a China space analyst at the Federation of American Scientists in Washington. "It's a very serious issue."
Hughes and Loral reportedly entered discussions with the State Department on possible civil settlements last summer to end a criminal investigation by the Justice Department. The State Department also charged Lockheed Martin with 30 civil violations of the Arms Export and Control Act in April 2000 for providing an unedited technical report on another failure to Chinese engineers.
The technology clampdown and related foreign-policy issues pose a near-term threat to China's commercial goals. More than 80 percent of the world's commercial satellites are made in the United States. Export licenses are required to launch them aboard foreign rockets.
President Reagan gave the go-ahead in 1988 for a limited number of U.S.-built satellites to lift off from China. But licensing has been a political football ever since, periodically put on hold because of the bloody 1989 crackdown on pro-democracy demonstrators in Tiananmen Square and Chinese missile sales to other developing countries.
There also were accusations -- adamantly denied -- that Loral's chairman influenced a Clinton administration licensing decision with a hefty donation to the Democratic National Committee. License approval eventually was shifted from the Commerce Department to the more restrictive State Department.
The Clinton White House announced in November 2000 that it would resume processing export licenses and extend China's launch privileges through 2001 after Beijing agreed to a missile nonproliferation pact. But the Bush administration says outstanding issues remain in implementing the nonproliferation agreement. New satellite export licenses remain on hold. Sen. Jesse Helms, R-N.C., and three other lawmakers urged President Bush in July not to resume licensing under any condition.
U.S. satellite makers, however, insist the restrictions are bad business. They point out China already has access to European satellite technology. American manufacturers fear that if licensing isn't relaxed, foreign companies eventually will fill the void. China will get the technology either way.
Not surprisingly, Beijing isn't happy about the restrictions either.
"Once the satellite enters Chinese territory, it is constantly monitored by the U.S. side," said Luan, who also is a member of China's governing Central Committee of the Communist Party. "We do not have the intention nor are we capable of obtaining any technology from these transfers."
Looking ahead
If Sino-American relations continue to thaw, it's possible U.S.-built satellites will resume riding to orbit on Chinese rockets soon. If they don't, China's launch industry likely will ramp up anyway. China plans to launch up to 30 Chinese-built communications, weather, science and military satellites during the next five years. In comparison, the country has launched only 48 Chinese-built satellites since the first one in 1970.
Developing countries such as Pakistan, Iran and Thailand are moving ahead with their fledgling space programs as well. China is expected to land the vast majority of their launch business. Customers in the United States and Europe also are showing new interest in Long March after the rockets' trouble-free performance in recent years.
Western companies are interested for another reason, too: cost. Launches on Chinese rockets are often 15 percent to 30 percent cheaper than missions aboard Europe's Ariane fleet or American-made Boeing and Lockheed Martin boosters. That's despite U.S. export rules that keep some Chinese launch prices artificially high. Cheap labor, inexpensive raw materials and government pricing allow Great Wall Industry Corp. to undercut its competition worldwide.
China will become an even more formidable competitor when it adds a powerful new planned booster to its catalog in the next few years. It will allow Long March to go head to head for the heaviest payloads with the new Atlas 5 and Delta 4 rockets being built for the Air Force, as well as the Europeans' massive Ariane 5. The new booster will be equipped with safer new rocket engines that burn liquid hydrogen, liquid oxygen and kerosene instead of more-hazardous fuels.
While gloomy forecasts pervade many Western launch companies, there is a feeling of unbridled optimism here in China. The Chinese are close to mastering rocket science and marketing. Now, they're working on public relations.
"I am still not sure why the U.S. government is stopping satellites from being transferred to China for launching," Luan said. "I think at this stage, satellite technology should be open to all mankind, and all space agencies should cooperate very closely to achieve that goal."
Michael Cabbage can be reached at mcabbage@orlandosentinel.com or 321-639-0522.
Jade and Poohbah, I'm counting on you both, if you have the time -
- to add some good links pertaining to China's missile advancements/accomplishments
and/or missile sales to other countries such as North Korea, Syria, Iraq, Libya etc. Thanks.
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