EU-China Partnership On The Galileo Satellite System: Competing With The U.S. In Space

EU-China Partnership On The Galileo Satellite System: Competing With The
U.S. In Space
By José Carlos Matias
Japan Focus, July 18, 2007


When the European Union and China agreed to cooperate to develop the
E.U. Galileo Satellite System in 2003, the United States reacted with
strong skepticism since Washington was against the sharing of
sensitive dual-use technology (with civilian and military
applications) with China. In the past, the United States had tried
unsuccessfully to impede the European Union's ability to set up
Galileo, which is an alternative to the U.S.- established Global
Positioning System (G.P.S.). At the time, U.S. analysts questioned
why Brussels was spending money (3.6 billion euros) to duplicate an
existing system that was available "for free," and why it was eager
to accept Chinese participation in the program.

Galileo satellite

Four years later, the E.U.-China "maturing partnership" has evolved
toward a more complex network of common and contradictory interests,
as the transatlantic links have slowly recovered since the U.S.-led
intervention in Iraq. Moreover, China has begun to develop its own
Global Navigation Satellite System (G.N.S.S.) -- the Beidou-2. At the
same time, the Galileo deployment has suffered a crisis due to
disagreements among the industries that were awarded the concession
to build and deploy the first four satellites of the Galileo system.
Public funding may save Galileo, but the best case scenario for a
successful program is for the actors involved to pursue a more
realistic approach. In addition to China's announcement of upgrading
Beidou to mass market applications, Russia has also decided to
complete its own G.N.S.S., called Glonass. In the face of these
developments, what will be the impact of developing the Chinese
G.N.S.S. for E.U.-China cooperation and to the commercial feasibility
of Galileo?

Galileo: Europe's Great Leap Outward

The European Union and the European Space Agency (E.S.A.) made the
decision to create its own G.N.S.S. due to a combination of factors
that imply political, economic, technological, social and military
gains. Politically, Galileo has been portrayed as a guarantee of
independence and autonomy from the U.S.-established G.P.S.

This perspective became more evident in the aftermath of the Kosovo
War when European forces were fully dependent on the U.S. system, a
limitation that has worried the actors involved in the development of
a European Security and Defense Policy (E.S.D.P.), especially the
member states that stand for the modernization of autonomous E.U.
military capabilities.

Galileo Global Navigation System

Since the beginning of the definition phase of Galileo, the European
Community (E.C.) papers have noted the importance of Galileo for its
Rapid Reaction Force, the E.U. peacekeeping missions and, separately,
the realm of activities related to the "Petersburg Tasks," the latter
of which are a set of security and military tasks in the field of
peacekeeping and stability operations, agreed upon in 1992 among the
E.U. members. It is noteworthy to underscore that the defense-related
justifications for Galileo have been downplayed by the E.U.
institutions. The E.U. institutions have highlighted the economic
benefits of a G.N.S.S. Requested by the E.C., the consultancy company
Price Waterhouse Coopers drew a business plan for the Galileo
project, which was submitted to the European Council of Ministers.
According to this study, by involving private sector actors, Galileo
"should generate revenues for the operator rising from some 66
[million euros] in 2010 to over 500 [million euros] in 2020."
Definitively, Galileo would create a "virtuous cycle" through a
spin-off effect in several sectors of the European economy. Moreover,
Galileo has been portrayed as an instrument to create thousands of
jobs and as a way to avoid the brain drain in the realm of aerospace,
aeronautics and satellite industries.

Galileo imaging system

The claim: Galileo's new technology will revolutionise our transport
systems, increasing safety and improving efficiency; this will make
for better quality of life and less pollution in our cities. Galileo
will also bring benefits in other aspects of everyday life, with
precision farming raising yields, improved information for emergency
services speeding up response times, and more reliable and accurate
time signals underpinning our most vital computer and communications
networks.

Undoubtedly, Galileo signifies independence and autonomy from the
United States and the ownership of cutting-edge technology. Galileo
has been regarded as a key instrument not only in the process of
modernization of the Common Foreign and Security Policy and E.S.D.P.,
but also part of the ongoing integration of the European Union's
defense industry.

The U.S. Response

U.S. opposition to the European G.N.S.S. can be understood in two
different, but complementary, perspectives: economic reasons (in
terms of market share of G.N.S.S. services) and security and military
concerns. In 2001, the former U.S. Deputy Secretary of Defense Paul
Wolfowitz addressed the central problem in Washington's perspective
by expressing, in a letter to the N.A.T.O. member states, the concern
that Galileo could interfere with U.S. military operations guided by
G.P.S. Wolfowitz also expressed the willingness of the Pentagon to
take part in the development of Galileo, justifying this position
with the fact that N.A.T.O. enjoyed the benefits of G.P.S.

After Washington's "diplomatic offensive," analysts thought that the
birth of Galileo was in danger. Yet in March 2002, there was a
breakthrough and Galileo saw the green light during the Barcelona
Summit of Heads of State and Government. After failing to put Galileo
on the backburner, Washington started to emphasize concern over the
interference of signals between the two G.N.S.S.s. This problem was
solved in June 2004 with the interoperability agreement between the
United States and the European Union. Yet even before, in October
2003, another problem came into sight when Brussels and Beijing
signed the cooperation agreement on the development of Galileo.

The China Dimension

On September 18, 2003, the E.C. announced that China was to join the
Galileo undertaking and finance it as a preferential external
partner. According to the agreement, China would contribute at least
230 million euros. From Washington's point of view, this partnership
posed several dangers to the transatlantic relationship and
especially to the security and economic interests of the United
States. Basically, by involving China in the development of Galileo,
the European Union was indirectly helping the modernization of the
People's Liberation Army (P.L.A.), an act that is regarded as
unacceptable by many analysts and politicians in Washington.

Indeed, it would be almost impossible to prevent the transfer of
technology to the Chinese. This has been a very sensitive issue at a
time when the United States is increasingly preoccupied with the
military capabilities of China. In addition, the Europeans could be,
in practice, contradicting the arms embargo imposed on Beijing in the
aftermath of the Tiananmen Massacre. In the worst case scenario -- a
war between China and Taiwan -- the P.L.A. would be using the
European G.N.S.S. in a war against Taiwanese military forces. The
possibility of the P.L.A. using the Galileo system was ruled out by
E.U. authorities since the most accurate signal, the Public Regulated
Service (P.R.S.), is encrypted and can only be used by specific
entities: the European Police Office (Europol), the European
Anti-Fraud Office (O.L.A.F.), civil protection services, safety
services (Maritime Safety Agency), emergency response services,
humanitarian response teams and the E.U. peacekeeping forces involved
in the "Petersburg Tasks" missions.

In any case, the United States was not convinced with this guarantee
and spurred the development of a new generation of G.P.S. satellites.
In 2004, a British media report unveiled that the United States was
developing anti- satellite systems capable of wiping out E.U. Galileo
satellites if they were being used against U.S. troops.

For the European Union, the partnership with China represents an
attractive opportunity to have access to a promising transport and
telecommunication market. Right after the signing of the E.U.-China
agreement, Loyola de Palacio, the former E.C. commissioner for
transport and energy, made Europe's stand very clear, stating that
"China will help Galileo become the major world infrastructure for
the growing market for location services." This level of cooperation
can only be understood in light of a Sino- European "maturing and
comprehensive partnership" based on intense economic and political
linkages. Simultaneously, the European Union has been projecting
itself as a global player -- for some analysts, a rather civilian
power -- with ambition to develop its autonomy and independence from
the United States in terms of military capabilities.

Growing Competition from China and Russia

In China's eyes, cooperation in the Galileo project is seen as part
of a strategy of strengthening China's position in the international
arena, by cooperating in a sensitive technology that disrupts U.S.
hegemony in G.N.S.S. In addition, this cooperation appears to be a
golden opportunity to benefit from the transfer of expertise and
technology in such a sensitive asset. This would be extremely useful
in tandem with the Chinese Space Strategy.

In 2000, China published the White Paper on Space Activities,
declaring that the creation of an independent satellite navigation
and positioning system was a priority. The embryo of this system was
already in orbit when China and the European Union agreed on the
partnership. The Beidou system consisted, at the time, of three
geostationary satellites, whose positioning and navigation coverage
and accuracy was far behind what Galileo aimed for.

The Beidou system

Analysts believed that the future Beidou-2 (also called Compass
System), a 35-satellite constellation, would only be used by the
military -- this would justify the decision of investing 230 million
euros in the Galileo system. In November 2006, however, China's
official news agency, Xinhua, unveiled that the Beidou system would
provide, from 2008 onward, commercial open services with a ten-meter
accuracy. It was noted that this service could be "free of charge"
for the Chinese people and to other countries that would sign
agreements with China.

In addition to Chinese pressure, Russia announced in May 2007 that
its own G.N.S.S., the Glonass system, which had been only partially
operable, would be fully operable and available "for free" to
customers in 2009 after the deployment of the remaining satellites of
a 24 constellation. Meanwhile, the process of deployment of the first
four Galileo satellites went into crisis, due to strong disagreements
between the national industries of consortia responsible to build and
deploy those satellites. Until July 2007, only one satellite -- Giove
A -- was deployed (in December 2005). The whole process is delayed
and what was supposed to be in orbit and operable in 2008 was
postponed to 2011-2012. In face of these hurdles, the E.U. transport
ministers asked the European Commission to draw a plan to "bail out"
Galileo through public funding.

Conclusion

Currently, the European Union faces growing pressure from the other
major space powers in the realm of satellite positioning and
navigation. With the new developments of the Beidou system, the
promise of profitable access to the Chinese transport and
telecommunication market may be in danger. What was deemed to be
strategic cooperation may become strategic competition. The progress
in the Beidou system implies that Chinese authorities were aware of
its probable limitations in seizing the military benefits of the
transfer of technology. At this moment, it is not clear how the
E.U.-China partnership will evolve, given that it faces a complex
network of common and contradictory interests. It is plausible that
both parties may reach a solution to share the market through
consultation. It is important, however, to bear in mind that the
E.U.-China relationship is still, to some extent, a consequence of
the other parts of the triangular equation: the U.S.-China
relationship and the U.S.-E.U. transatlantic alliance. The rapidly
announced development of the Chinese Beidou system and the Russian
Glonass has put pressure on E.U. authorities to solve the imbroglio
and spur the deployment of the remaining satellites. As a reaction to
the foreseeable competition, Brussels has been eager to set up
agreements with other countries. In June 2007, the E.S.A. paved the
way to satellite cooperation with Africa through a cooperation
agreement with the Agency for Security of Air Navigation in Africa
and Madagascar. Previously, Israel, Ukraine, India, Morocco, Saudi
Arabia and South Korea had signed agreements to become partners and
join the Galileo project.

In the meantime, even if there are some doubts on the commercial
feasibility, it is becoming clear that the defense and military
applications are, per se, a strong reason to use European taxpayer
money to save Galileo.