The Digital Silk Road: China's Quest to Wire the World and Win the Future by Jonathan Hillman

Author:Jonathan Hillman [Hillman, Jonathan]
Language: eng
Format: epub
ISBN: 9781788166850
Google: kaQozgEACAAJ
Publisher: PROFILE BOOKS Limited
Published: 2021-09-28T23:28:23.584450+00:00

“THIS BOLD AND STRATEGIC STEP”

China is also carving out a niche as the go-to provider for developing countries that want their own communications satellites.65 For about $250 million, only a fraction of which is required up front, countries can acquire their own communications satellite. China provides generous financing, often covering up to 85 percent of the cost through its Export-Import Bank and the China Development Bank. Satellite financing typically takes half a year or longer after the initial contract is signed, but China pays upon signing. Along with the satellite, China also provides ground stations, testing, training, launch, and operations support.

China’s starter kit for countries with space ambitions has wide appeal—and widely ignored risks. Every leader gets to play the role of President John F. Kennedy, igniting citizens’ imaginations as they reach for the stars, even if China is doing the heavy lifting. National pride is evident in even the satellites’ names. Venezuela named its Chinese-made satellite “Simón Bolívar.” Bolivia went with “Tupac Katari,” named after an eighteenth-century indigenous leader. As of early 2021, at least nine countries have bought or are in the process of buying communications satellites from China, which is following in the footsteps of U.S. and European companies that have sold satellites for decades.66

China’s most popular model is the DFH-4, a behemoth that weighs as much as an elephant and has solar panels spanning over a hundred feet.67 It is geostationary, meaning the speed of its orbit matches the earth’s rotation, so it appears to hover over one spot. To avoid export restrictions, it is manufactured without U.S. components.

All China’s foreign satellite sales run through the China Great Wall Industry Corporation, which U.S. officials have labeled a “serial proliferator” for sharing military technology.68 Founded in 1980, the company is a subsidiary of the state-owned, defense-industrial conglomerate China Aerospace Science and Technology Corporation (CASC) and was sanctioned for exports to Pakistan in the 1990s and Iran in the 2000s.69 In addition to selling satellites and satellite capacity, China Great Wall provides launch services, attracting customers that already have their hardware and are looking to hitch a ride. As it has grown, the company has spun its own web of subsidiaries, including hotel and real estate operations. Great Wall does not actually build anything and acts as a trading company of sorts, extracting rents from CASC and increasing the inefficiency of China’s state-run approach.

Many of China’s customers have struggled. The cost of the satellite, after all, is only one part of running a satellite company, which spans engineering, marketing, and customer service, plus building out terrestrial infrastructure in remote places. After joining the elite club of satellite operators, these new members have to compete against better-resourced incumbents with more experience. Nor is bandwidth demand unlimited. In Asia—and increasingly around the world—the glut of new entrants into the satellite market is outpacing demand for bandwidth access, especially as high-throughput satellites are poised to further boost capacity.70

The results are often disappointing. As Blaine Curcio, a leading expert on Chinese aerospace

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