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China building US$9b rival to American-run GPS

Hong Kong

CHINA is taking its rivalry with the US to the heavens, spending at least US$9 billion to build a celestial navigation system and cut its dependence on the American-owned GPS amid heightening tensions between the two countries.

Location data beamed from GPS satellites are used by smartphones, car navigation systems, the microchip in your dog's neck and guided missiles - and all those satellites are controlled by the US Air Force. That makes the Chinese government uncomfortable, so it's developing an alternative that a US security analyst calls one of the largest space programmes the country has undertaken.

"They don't want to depend on the US's GPS," said Marshall Kaplan, a professor in the aerospace engineering department at the University of Maryland. "The Chinese don't want to be subject to something that we can shut off."

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The Beidou Navigation System, currently serving China and neighbours, will be accessible worldwide by 2020 as part of President Xi Jinping's strategy to make his country a global leader in next-generation technologies. Its implementation reverberates through the corporate world as makers of semiconductors, electric vehicles and airplanes modify products to also connect with Beidou in order to keep doing business in the world's second-biggest economy.

Assembly of the new constellation is approaching critical mass after the launch of at least 18 satellites this year, including three this month. On Nov 19, China launched two more Beidou machines, increasing the number in operation to more than 40. China plans to add 11 more by 2020.

Beidou is one element of China's ambitious campaign to displace Western dominance in aerospace. A state-owned company is developing planes to replace those from Airbus SE and Boeing Co, and domestic startups are building rockets to challenge the commercial launch businesses of Elon Musk's Space Exploration Technologies Corp and Jeff Bezos's Blue Origin.

Next month, China is scheduled to launch Chang'e 4, a lunar probe that would be the first spacecraft to the far side of the moon. A Mars probe and rover are also scheduled for lift-off in 2020.

"It is classic space-race sort of stuff," said Andrew Dempster, director of the Australian Centre for Space Engineering Research in Canberra.

China started developing Beidou in the 1990s and will spend an estimated US$8.98 billion to US$10.6 billion on it by 2020, according to a 2017 analysis by the US-China Economic and Security Review Commission. The system will eventually provide positioning accuracies of one metre or less with use of a ground support system.

By comparison, GPS typically provides accuracies of less than 2.2 metres, which can be improved to a few centimetres with augmentation systems, the commission said.

"The Beidou system has become one of the great achievements in China's 40 years of reform," Mr Xi said in a Nov 5 letter to a United Nations committee on satellite navigation.

The system, named after the Chinese word for the Big Dipper star pattern, is at the core of an industry that will generate more than 400 billion yuan (S$79 billion) of revenue in 2020, according to a forecast by the China Satellite Navigation Office.

Beidou also has potential for export as part of China's "Belt and Road" initiative to build political and economic ties through funding of infrastructure projects in other countries, the US-China security commission said.

NavInfo Co, a maker of electronic maps that's backed by Tencent Holdings Ltd, wants to begin mass producing semiconductors for navigation systems using Beidou in 2020, said Wang Yan, a project director.

Beijing-based NavInfo, which supplies Tesla Inc and Bayerische Motoren Werke AG, expects annual demand of 15 million Beidou-linked chips for autonomous vehicles. In September, NavInfo started providing Beidou-enabled mapping and positioning services for the Singapore government.

"China needs to have its own satellite navigation system from a long-term, strategic perspective," Mr Wang said. "Beidou is the only option." BLOOMBERG