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[This was in a 1998 hearing regarding Bill Clinton’s Chinagate Scandal]

U.S. Satellite Technology Transfers To China: What’s At Issue, Questions & Answers
http://www.npolicy.org/article.php?aid=420&rid=1

Henry Sokolski’s testimony presented before a joint hering on the House International Relations Committee and the House National Security Committee.

Jun 17, 1998
AUTHOR: NPEC executive director Henry Sokolski
US Satellite Technology Transfers to China (PDF) 22.27 KB

U.S. Satellite Technology Transfers To China:
What’s At Issue, Questions and Answers

Q. In allowing U.S. satellite technology transfers to China, isn’t the Clinton Administration simply doing what the Bush Adminstration did before it?

A. No, there are differences. Although Clinton and Bush both waived Tainamen Square sanctions to allow U.S. satellite technology transfers to China, the Clinton administration went much further in loosening controls over them by moving virtually all commercial satellite technology from State to Commerce Department controls. This shift has eliminated systematic government monitoring of prelaunch conversations between U.S. contractors and Chinese space firms and, according to the General Accounting Office, marginalized the previously important licensing input of the Defense Department.

Q. But isn’t the most important point that Reagan and Bush started this commerce?

A. It’s hard to see how. Either the transfer of critically important military technology is an inevitable part of launching U.S.-made satellites or it’s not. If it is, then persisting in the business (with 14 launches) is just as blameworthy as starting it (with 4). Indeed, it could even be worse if you began such commerce in the vain hope that you could control its diversion but persisted in transferring satellites knowing that it couldn’t. On the other hand, if you believe U.S. controls can prevent the Chinese military from benefiting from such trade, then, not who started such commerce, but who has allowed what to be transferred are the critical issues.

Q. OK. But if China could hit Los Angeles with a nuclear warhead before it launched its first U.S.-made satellite,what more of military significance could it gain for its missile forces from U.S. satellite makers?

A: Plenty. China has repeatedly objected to U.S. development of missile defenses that could neutralize China’s missile forces. In this regard, China’s mastering of how to place single and multiple satellites in exact locations in space (with precision satellite kick motors and multiple satellite dispensers) is directly applicable to its current efforts to develop missiles with post boost vehicles (PBVs) and multiple independently targetable reentry vehicle systems (MIRVs) designed to overwhelm or evade such defenses. Its latest solid-rocket missile projects — the DF-31, DF-41, and J1-2 — in fact, are all believed to be perfecting such systems. Also, China is keenly interested in making their theater missiles accurate enough to destroy targets (e.g., in Taiwan) without having to use chemical, nuclear or biological weapons. Acquiring such accuracy is intrinsic with placing sophisticated satellites precisely on station — something China has had a 100% success rate with since the Loral and Hughes failures of l996.

Q. Putting missile improvements aside, though, isn’t it clear that keeping U.S.-made satellites from prying Chinese eyes has effectively kept the Chinese military from exploiting such commerce for its own satellite needs?

A. Not really. Increasingly, the Peoples Liberation Army (PLA) is using U.S.-made satellites to transmit military encrypted message traffic. China has especially relied upon U.S.-made satellites over which it has operational control — e.g., the APTStar and Chinastar satellite series. China is also trying to develop advanced communications satellites of its own with Western help (a project Hughes wanted permission to work on before the recent Loral-Hughes flap). This, in the final analysis, however, is pointless unless China develops rocket systems that are reliable, gentle, and precise enough to place such satellites safely on station. U.S. satellite launch revenues to China (approximately $500 million since l990), launch experience with advanced U.S.-made satellites (nearly half of China’s last 30 launches), and transfer of associated technology have all served this purpose.

Q. But doesn’t Chinese use of U.S.-made satellites make it easier for our intelligence agencies to intercept whatever encrypted messages the Chinese military might transmit?

A. Not enough to justify U.S. satellite transfers. Indeed, supplying the PLA with satellite communications is hardly the preferred way for the U.S. to intercept China’s message traffic since it enables China to use a variety of antenna to transmit an increasing volume of encrypted messages at a lower cost. To the extent Chinese encryption may be strong and the satellite antenna used are narrow in beam width, our intelligence agencies’ task of intercepting Chinese communications will become more, not less difficult with increased PLA use of our satellites.

Q. At the end of the day, though, don’t U.S. satellite makers have to use Chinese launchers to stay competitive since Chinese launchers are so much cheaper than alternative launch services?

A. Hardly. Even by the U.S. satellite industry’s own calculations, Chinese launch services save them only 10 to 15 percent over alternative providers and this advantage is expected to evaporate over the next 36 to 48 months when newer American., Russian, and Ukrainian alternative launch services come on line. What makes U.S. satellite makers competitive, moreover, is not lower cost launchers, but higher quality satellites: These frequently cost one or two times more than the launch and produce even more in revenues over their lifetime.

Q. But if the U.S. forgoes satellite business with China,won’t this merely open the Chinese satellite market to America’s competitors?

A. None that we know of. Over 75 percent of the world’s commercial satellites, in fact, are either made in the U.S. or require U.S. permission to be launched because they contain key U.S. components. Virtually all the remaining commercial satellites come from member nations of the European Space Agency (ESA), who are inclined to launch their satellites on ESA launchers. As for making satellites in China, this market is already saturated: Dailmer-Benz is already working with the Chinese military to develop an advanced communications satellite but so far the system (after two launchings) has yet to work.

Q. If there is a technology transfer problem, isn’t putting all commercial satellites back under State controls the preferred fix?

A. Not necessarily. If State controls are not enforced with proper monitoring or if compliance concerns are not taken up by senior political officials and the contractors challenged to address possible control infractions (two complaints some government monitors had from l993 through l995), shifting back to State controls will do little good. Indeed, merely shifting controls back to State might only give use a dangerous, false sense of security. If the customer (e.g., the PLA) is intent on diverting technology, even the best controls cannot prevent it. Here, barring satellite technology transfers or, at least, transfers of the most advanced satellite types may be appropriate.

Q. What, then, should Congress do?

A. Keep things from getting worse until it gets all the answers. The House and Senate should insist that no further satellite transfers be allowed until its investigations and deliberations over this matter are complete. There simply is no substitute for determining what, if anything, of military significance was transferred to China and whether or not such transfers could have been prevented by tighter controls. If nothing was transferred, then, all’s well. If something was transferred, then, Congress must determine what it was, what else of value might be at risk, and whether or not these risks can be eliminated by tighter export controls or if barring future transfers is required.

Q. How should Congress go about doing this?

A. Stop pointing fingers or proposing easy solutions and get to work. It would be useful to depose all of the current and previous officials tasked to monitor this commerce along with their private corporate counter parts. It may be necessary to grant the later immunity. In no case, however, should Congress be reassuring the Executive Branch or private industry now that politically easy solutions — such as merely moving commercial satellites back to State controls — are the agreed way out. Indeed, too much partisan political capital has already been expended on this controversy for Congress to do anything less than a substantive oversight effort unprejudiced by preconceived solutions. Certainly, if Congress fails to do this, the credibility of both parties — Democratic and Republican — will suffer along with pubic regard for Congress and, more important, for the rule of law and our nation’s security.