CHINA'S SPACE PROGRAM: COMMERCIAL AMBITIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00907R000301020007-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 22, 2016
• Document Release Date: April 30, 2012
• Sequence Number: 7
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP04T00907R000301020007-1 5X1
Central Intelligence Agency
China's Space Program: Commercial Ambitions
China's recent signing of its first contract to launch a US communications satellite
is a milestone in an ambitious space launch program which, if successful, may
generate foreign currency earnings of $100 million in 1988 and $500 million per year
by the mid-1990s:
? Beijing last month signed a $27.5 million contract with the US Terasat corporation
to launch a Western Union communications satellite in February 1988. Terasat
reportedly also secured options to launch two additional satellites probably at the
same price each.
? The Chinese initialed a $4 million contract in January to place a small Swedish
satellite into low Earth orbit as part of a dual payload with a Chinese satellite in
October 1988 and is negotiating launch agreements with Canada, Great Britain,
Brazil, Iran, Pakistan, and some African countries.
Beijing plans in the near future to offer complete
communications systems to Third World countries--including the satellite, space
launch vehicle, and launch services.
The agreement to launch a US satellite undoubtedly will give China's marketing
program a boost because US firms will require that the Chinese launchsite meet US
standards. The Chinese will gain little new technology, however, by launching a
Western commercial satellite of standard design and cannot exploit the satellite
itself, unless it is out of US control for an extended period:
? The mechanical and electrical connections between the satellite and launch
vehicle do not involve sensitive technology.
? US checkout equipment taken to the launchsite will be under US control and will
be removed after launch.
? The Chinese have assured foreign customers that they will have access to a
dedicated clean room and checkout and handlin building that will allow them to
maintain security. buithe Chinese are building a
separate checkout and handling facility at the Xichang launch site.
China has an impressive launch capability, which we estimate could provide foreign
customers 10 to 20 launches per year by the 1990s from three separate facilities:
Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP04T00907R000301020007-1
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP04T00907R000301020007-1
Figure 3
Chinese Satellite Launch
Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP04T00907R000301020007-1
 Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP04T00907R000301020007-1 "5X1
? Up to six geostationary satellites can be launched per year from Xichang and
from six to 12 satellites per year from two pads at Jiuquan.
? In addition, the Chinese might use facilities at Wuzhai for one or two polar
launches per year.
? Beijing has three proven space launch vehicles--the CZ-1, CZ-2, and CZ-3--all
developed from Chinese ballistic missiles.
We expect the Chinese to sign up more foreign customers in the next year, and, if
Beijing successfully meets its first few launch schedules, there should be no lack of
additional customers:
? Chinese prices are highly competitive--at least 15 percent below those for
comparable services from the European Space Agency or the National
Aeronautics and Space Administration.
We believe that hard currency earnings from Beijing's space marketing campaign will
help underwrite improvements in China's ballistic missiles, a factor which may help
explain Defense Minister Zhang Aiping's keen interest in the sale of launch services
during Secretary Weinberger's visit to China last year:
? The ministries and industries that oversee China's space launch program are also
directly responsible for the development of ballistic missiles.
? Beijing has reportedly promised its defense industries that each would be allowed
to reinvest profits from foreign sales to develop modern weapons.
? In addition, the Great Wall Industrial Corporation--the chief agent for sales of
launch services--is China's major purchaser of missile-related technology.
Declassified in Part - Sanitized Copy Approved for Release 2012/04/30: CIA-RDP04T00907R000301020007-1