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U.S. regulation on China-related space activities and its effectiveness in the market

A Chinese Long March 3B rocket successfully placed Eutelsat’s W3C commercial telecommunications satellite into geostationary transfer orbit Oct. 7, 2011. This was a special event as it was the first launch of a Western satellite by a Chinese launch v

ehicle in more than 12 years as the U.S. government has instituted a de facto ban on satellite technology exports to China.

The launch occurred from the Xichang Satellite Launch Center in southwest China. There the Long March 3B placed the W3C into a transfer orbit from which it is expected to use its own power to circularize its position and then drift to its planned operating slot at 16 degrees east.

Paris-based Eutelsat said the “spacecraft was healthy in orbit after launch. W3C, a Thales Alenia Space Spacebus 4000 C3 model, carries 53 Ku-band and three Ka-band transponders and will deliver telecommunications services to Europe, the Indian Ocean region and parts of Africa.” It is designed to deliver 12 kilowatts of power to its payload at the end of 15 years of service life in orbit.

The U.S. government had placed a ban on space related activities with China, due to the fear that China was using commercial satellite launches to perfect its missile technology, especially ICBMs. The U.S. Congress in 1998 passed a law that reclassified all commercial satellites as weapons systems for export purposes. This made satellites subject to the International Traffic in Arms Regulations (ITAR), and included the entire space industry under the United States Munitions List (USML) which requires approval from the Department of Defense in order to make transfer of any technology, part or personnel to overseas, 22 U.S.C. § 2778(a)(1).

The fear against China grew in the late 1990s when the U.S government suspected that China had illegitimate access to confidential information regarding rocket technology, which could be used for its ICBM arsenals as well. Thus, the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999 specifically mentioned China as a county to which any export of satellite and related technology is under stricter regulation than other countries, Strom Thurmond National Defense Authorization Act For Fiscal Year 1999, PL 105–261, § 1511(1). As a result, not only U.S. companies, but also national parties that use ITAR materials in their products were not allowed to use Chinese space launch services, Marcia S. Smith, China’s Space Program: An Overview, CRS Report RS21641, at 5.

The policy was designed to protect U.S. industry and national security. However, it is doubtful those policy goals have been successfully met. In order to use Chinese launching vehicle and get away from ITAR and other U.S. regulation, Franco-Italian satellite builder Thales Alenia Space developed “ITAR-free” products that do not use any ITAR regulated parts in their products. The company sold several sets of these satellites, attracting both Chinese and non-Chinese operators seeking to use Chinese launching fleets.

The reason why the Chinese launch seems so attractive is because they provide service at a much lower cost – even in the 1990s the Chinese launch was presumed to be

at least 30% more economical than U.S. or European counterparts. The ITAR restriction was the only means to ensure U.S. advantage over Chinese launch despite the reliability issue. However, with such “ITAR-free” satellites, U.S. launch service providers are facing a direct threat and increased competition. Also, regardless of the U.S. restriction, China has already developed and maintained long range missile technology, an effective Multiple Independently-targetable Reentry Vehicle (MIRV) of its own, J Barry Patterson, China’s Space Program and Its Implications for the United States, (Apr. 19, 1995) (unpublished research report for Air War College Air University) at 21.

The space industry argues that the U.S. has more reliable technology that still attracts most satellite operators of the world. Yet, a reliable launch from U.S. or European vehicles could result in a loss of millions of dollars. China is likely to gain more customers, especially from the growing market of the developing countries. So far, one of the reasons why major satellite operators have refrained from using Chinese service was due to the fact that the U.S. government is one of their major contractors. However, that cannot prevent satellite operators to use a Chinese launch indefinitely; Eutelsat, which owns the W3C satellite also performs many U.S. based operations, but they chose to use an ITAR-free satellite for the Chinese rocket. Therefore, in order to protect the U.S. space industry, current ITAR and USML regulations should be modified to better serve the industry in more efficient ways.

Photo obtained from


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