BLOWING THE WHISTLE

In a move that will affect China's commercial space business and could hamper U.S./Chinese space cooperation, the U.S. Treasury Dept. has frozen the financial assets of the China Great Wall Industry Corp. and another Chinese space exporter for allegedly aiding Iranian missile development.

In addition to the Treasury Dept., the Federal Bureau of Investigation has been gathering evidence against the company, federal officials said.

The Iranian missile programs involved are also tied directly to development of the third-stage solid rocket motor for the North Korean Taepo-Dong-2C/3 ballistic missile, according to an analysis by GlobalSecurity.org. Iran has specifically aided the North Korean third-stage design, the think tank says.

A Taepo-Dong was poised on its North Korean launch pad late last week for a possible flight test that raised international alarm even before liftoff. The concern is that the upper stage could, in future years, be armed with a nuclear weapon capable of striking Japan, part of the continental U.S. or American sites around the Pacific such as Alaska, Hawaii and Guam.

The Chinese have also provided extensive rocket technology to help the North Korean Taepo-Dong.

AS IN A 1998 TEST, GlobalSecurity.org believes the North Korean flight could be couched as a satellite launch, but in reality would be a "wolf in sheep's clothing" attempt to develop a 5,000-7,500-mi.-range ICBM.

The sanctions come as Great Wall seeks to expand beyond Long March launch services to satellite components coupled with banking activities to finance such ventures (AW&ST June 23, 2003, p. 37). The asset freeze could especially hurt Great Wall's self-financing plans. Although the freeze could complicate Great Wall's business dealings, there already are long-standing U.S. restrictions on the launch of American components or satellites as part of Long March payloads.

Long March boosters have conducted 24 international commercial launch missions and six piggyback missions, lofting 30 Chinese and international satellites. The company's prices have undercut both U.S. Atlas and Delta launchers and the European Ariane, taking some business away from these operators.

China Great Wall Industry Corp. (CGWIC) is owned by the Chinese government, and the U.S. government's accusations concerning Iran are aimed as much at the Chinese government as company representatives. Chinese officials reacted angrily to the asset freeze.