Boeing cancels satellite deal involving hidden China funding


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Boeing has canceled its sale of a communications satellite to a company that appears largely funded in secret by Chinese sources.

Boeing says it has canceled a controversial satellite order from a U.S.-based startup, which had received the bulk of its funding from a Chinese-government owned financial company. The deal, which critics warned could give China access to sensitive technology, comes amid a period of especially acrimonious relations between Washington and Beijing over a host of issues, including industrial espionage and intellectual property theft.

The Chicago-headquartered aerospace company announced its decision, which it said was only because of non-payment on the part of the customer, to nix the deal, worth more than $200 million, on Dec. 6, 2018. Two days earlier, the Wall Street Journal had published an expose detailing the links between the official buyer, Global IP, and a string of Chinese government operated entities and individuals with significant connections to China’s Communist Party and military establishment.

If carried out, the satellite sale would have provided the Chinese detailed information about the satellite’s technical design.

This story highlights the Chinese way of developing new technology: They generally steal it. Though their engineering upgrades are often brilliant, they have shown little innovation or originality in their work. Their entire manned program is an upgrade of the Russians Soviet-era space station program. Their decisions recently to build smallsat rockets as well as vertically landing reusable first stages only occurred after private commercial companies in the U.S. proved that both will work and can make money.

Boeing almost certainly backed out when it realized that the Chinese involvment was substantial, and exposed it to criminal penalties.

Hat tip Kirk Hilliard.

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7 comments

  • Jason Hillyer

    Good.

  • Jack O'Leary

    Meanwhile, the Russians may be cancelling a launch deal:. https://www.strategypage.com/htmw/htspace/articles/20181209.aspx

    Tyrannical regimes don’t play well with others.

  • wayne

    Kirk–
    Good stuff.
    I read that WSJ article, [and if I’m not entirely mistaken,] Boeing was completely informed as to the origin of the capital for Global IP, when the deal was originally inked. They didn’t care then and they don’t care now. The quintessential progressive capitalist-pigs who would sell the chi-coms the rope by which they would all eventually be hung.
    Someone in the 1 percent at Boeing, needs to go to a State prison, for their absolute malice aforethought & willful intent to violate the restrictions on technology transfer.

    As for the Chi-Coms, we will eventually be forced to make the CCP ruling-elite, go-away, once and forever. (And by go-away, I do mean, all-the-way gone.)

    Minuteman III
    launch animation
    https://youtu.be/S-V6MZlyCqE
    2:22

  • commodude

    Wayne,

    The people who improved the ChiCom space program overnight still walk the street. As long as the poltroons who sold Loral tech to them walk free, TANJ.

  • wayne

    Crony Chronicles:
    “I Want To Be A Crony”
    https://youtu.be/2aO9tA5DWJM
    1:39

  • Tom Billings

    “Though their engineering upgrades are often brilliant, they have shown little innovation or originality in their work. ”

    This exposes a deep problem in China’s technical world. If it is at all government-controlled, Chinese technical development funding will encourage depending on the government hierarchies, and, in this sort of case, the intelligence product the Ministry of Security can provide. This is both like, and unlike, the demands by Congress that US spaceflight launchers continually recapitulate Apollo/Shuttle levels of technology.

    In China, the demand to go elsewhere, whether by stealing or purchase, for basic technical concepts, does a great deal to make sure that government, and its masters in the Party apparatus, are in basic control, and the technicians are kept on a short leash. This is an intensely political matter as much as one of “stealing”. There must be no Chinese Elon Musk, much less a Jeff Bezos, forming *any* alternate power center to the Politburo! In the US, the ability to control specifications is of *local* benefit to specific politicians, but it does not threaten the WH power structure, even under an Obama-like Administration. If the threatened pols are as powerful as Richard Shelby, they can make trouble for alternate segments outside their own group of vassals, but they cannot demand anything not included in the Federal Budget they control.

    This Chinese tendency seems to hearken back to the days of Imperial China, where commerce was acceptable, as long as someone at Court, within reach of the Emperor, could be found as protector from anyone *except* the Emperor, and they could be reigned in by the Emperor. Neither Senator Shelby and his SLS/Orion coalition in Congress, nor the Chinese hierarchs, want the techies to get out from under their control. It’s just that Shelby has fewer sticks and fewer carrots to stop that from happening, …so far. Both have yet to leave behind pre-industrial patterns of thought:

    “When a society moves from allocating resources by custom and tradition (moderns read here, by politics) to allocating resources by markets, they may be said to have undergone an industrial revolution” Arnold Toynbee-1884

    Not surprisingly, they both have trouble matching industrial levels of productivity in the areas they most intensely control.

  • Col Beausabre

    Wayne – “Minuteman III”

    Which, interestingly enough was, made by….wait for it….drum roll….Boeing.

    http://www.boeing.com/defense/strategic-deterrence/

    So we want the primary contractor of the land based leg of the Triad playing footsie with a country which has essentially announced they intend “to bury us”

    What are they thinking of in DC ? I want the recipe for whatever they’re smoking !

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