Episode 9: Rocket Men - China in Space

Episode 9: Rocket Men - China in Space

Summary

In this episode: The story of Qian Xuesen, father of China’s space program. How American politics and China’s space program are entwined. And how Elon Musk and Peter Thiel are inspiring Chinese space entrepreneurs.

Transcript

Today, the International Space Station is the third brightest object in the sky, after only the sun and the moon. The ISS is the result of a collaboration between nearly all of the world’s space powers, the United States, Russia, Europe.

Chinese leaders wanted to be included in the ISS, but they were not. In the early 90s, when the ISS was being planned, anti-China sentiment in the United States was at an all-time high. It was just few years after the Tiananmen Square protests. Nancy Pelosi, then just a junior representative, posed for a photo in Beijing holding a banner expressing sympathy for pro-democracy protestors.

U.S. Congress barred China from the ISS, nominally because of China’s unwillingness to participate in a US-lead weapons non-proliferation program.

In the eyes of the Chinese, they had been refused “一席之地,” “a seat at the table.”

As a result, China’s space program developed on its own.

In the twenty five years since the founding of the ISS, China has launched a space lab, the Tiangong, sent men and women into space, put robots on the moon, and launched hundreds of satellites. The Chinese have done this in the face of American sanctions and outside of the international framework of the ISS.

In 2020, China will unilaterally launch its most ambitious project, the Tianhe-1. The Tianhe-1 is the core module for China’s own space station. That means that unless there are any extreme changes in world space programs, by the mid-2020s there will be two massive, shining space stations in the sky. One will be the ISS, the shared accomplishment of most of the world’s space powers. The other will be Chinese.

Today’s episode is about China in Space.

First, Qian Xuesen and the American origins of China’s Space Program.

Then: How American Industry and Politics helped to put China’s John Glenn into Orbit. And finally: How a generation inspired by Elon Musk is privatizing China’s space exploration.

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Part 1: The Father of China’s Space Program

While Qian Xuesen was an undergraduate student in Shanghai during the 1930s, the Japanese military had around 2,000 planes. China had only a few hundred. And when Japan bombed a helpless Shanghai, Qian was probably left with a lasting impression that military power and technological capability were one and the same.

Qian studied railroad engineering in China, but his interest was in aeronautics. But there were no aeronautics universities in China, so Qian looked abroad. He won a scholarship financed by the United States government, said to be significantly more competitive than a Rhodes scholarship. He was admitted by MIT, but Qian found his way to CalTech, which had a more developed aeronautics program.

What I’m about to say sounds kind of ridiculous, but while Qian was a graduate student at CalTech in the 1930s rocketry had a reputation as a field for crackpots. Even after World War II––after atomic bombs had dropped––rocketry still wasn’t mainstream. When Qian explained to some partygoers that he believed that humanity was on the cusp of spaceflight, they thought he was drunk.

Rocketry at CalTech was basically a club of nerdy grad students who called themselves the Suicide Squad––they accidentally blew stuff up sometimes. But as Nazi Germany grew more and more belligerent, nerdy grad students who accidentally blew stuff up grew very attractive to the American military. Qian, a Chinese national, was originally barred from working on classified projects. But once America entered the war, he was given more access.

Qian made significant contributions to the American war effort, and climbed to the temporary rank of lieutenant colonel. Even after the war, he continued to work on military projects. He worked on a team in Washington DC trying to explain to military elites how advances in rocketry would impact warfare.

These contributions to the American military make what would later happen to Qian all the more unbelievable.

After the war, aerospace at CalTech had changed considerably from Qian’s time as a grad student. When Qian had been a member of the “Suicide Squad,” its members had scrounged for a $1,000 budget. When Qian returned after the war as a faculty member, the military had also arrived: CalTech had a $3,000,000 aerospace research budget, courtesy of Uncle Sam.

But out of nowhere, in 1950, the FBI showed up at Qian’s office. It was the age of McCarthy and the agents interrogated him.

The FBI should have known Qian wasn’t a spy. He could have, maybe should have, been exonerated on the basis of his background alone. Qian grew up around China’s anti-communist elite. His father-in-law was a nationalist military official––which means that he actually fought against the communists.

And then, of course, there was the fact that Qian had chosen to start the process of becoming an American citizen. And, most obviously, there was his significant American military service. The interrogation demonstrated amazing ignorance at J. Edgar Hoover’s FBI. But then again, if you listened to Episode 4 on Industrial Espionage, maybe you’re not surprised.

Qian was furious and insulted by the interrogation. And he decided to return to China immediately. But, his interest to leave the country was seen as further evidence of his loyalty to Communist China. The US government decided that Qian knew too much. He was barred from leaving the country.

Qian spent the next four years at CalTech under the gaze of the FBI, disallowed from working on classified projects. But then the situation became even more perverse. In 1955 the government switched its position on Qian. He no longer knew too much. And they decided to deport Qian.

In China, Qian received a hero’s welcome. He was embraced by China’s political and scientific elite. He was named the chief administrator of China’s aerospace programs. His first effort was to educate a generation of Chinese aerospace scientists.

The result of his educative work was tremendous. In 1960, just five years after his deportation from the United States, China launched its first research rocket. Within 15 years, largely due to Qian’s administrative effort, Chinese scientists and bureaucrats were so confident that they had begun to train astronauts.

But Mao’s Cultural Revolution, which began in 1966, halted progress in space research for an entire decade. While scientists were protected from the worst of the insanity of the age, they were hard years for the man who had already survived McCarthyism.

Still, Qian and his team of rocket scientists had made unbelievable progress. By then China had the ability to launch nuclear warheads on ballistic missiles. An American Navy Secretary later said that deporting Qian “Was the stupidest thing this country ever did.”

I need to note that my conclusion of Qian’s innocence is based on the work of Iris Chang, his biographer. But some China hawks have clung to the narrative that Qian was indeed a communist spy. However flimsy its evidence, that was one of the assertions of a 1999 Congressional report named for Representative Christopher Cox. The same report denounces Taiwanese-American Wen Ho Lee, who you will remember from Episode 4.

Qian Xuesen lived until 2009, long enough to see China put its first astronaut Yang Liwei into space.

Part 2: Space Politics and Satellite Scandal

Before the 1990s, China had no official space program. China’s space administrators worked under the sizable umbrella of China’s military. The space administration was so secret that new employees were forbidden from telling their family members where they worked. The confidentiality could be Kafka-esque: Sometimes new employees weren’t even told where to show up for work.

But in the early 1990s, when world space powers began to collaborate on the ISS, China wanted in. Organizations like NASA were, understandably, not keen to work together with the Chinese military. So in a push for transparency, the Chinese National Space Administration was born.

This is one of the of the tricky parts of space technology: The line between military and civilian applications is fuzzy. Qian Xuesen, the subject of part one, is known as the father of China’s space industry, but he also lead the development of China’s ballistic missiles. It’s not a great stretch of the imagination to realize that the same forces that can make a rocket go up into space can also make it go across the Pacific Ocean.

So politics and space and China and the United States are entwined. Still, there has always been opportunity for companies and individuals that are willing to brave this diplomatic and regulatory gray area.

In the 1990s, one of those individuals was a Taiwanese-American named Johnny Chung. Chung ran a business as a fax blaster. As a millennial, I confess I had no idea what fax blasting was until I did this episode. Turns out, it’s the fax machine equivalent of e-mail spam. A fax blaster sends thousands and thousands of unsolicited faxes to unsuspecting recipients.

It’s as annoying as it sounds. Politicians have tried to kill fax-blasting through legislation at least twice.

In the early 90s, Johnny Chung’s fax-blasting business wasn’t doing very well. But in 1994 he made moves. Specifically, he began donating to the democratic party. Shortly thereafter, he took his first trip to China. It was the beginning of Chung’s career as a go-between for Chinese businesses and Washington democrats. He made nearly 50 visits to the White House between 1994 and 1996.

As Chung went back and forth, money followed. In one example, a Chinese beer company wired Chung $150,000. Three days later, $50,000 went to the Democratic National Committee. A photo of Bill Clinton, Chung, and the beer company’s executives went to China.

Chung was later quoted by the Chicago Tribune: "I see the White House is like a subway: You have to put in coins to open the gates."

With this attitude, Chung developed a reputation in China as an effective liaison. Eventually, he was contacted by a woman named Liu Chaoying, an executive at the China Aerospace Science and Technology Corporation. More significantly, she was also the daughter of the Chinese military’s highest ranking general: effectively China’s chairman of the Joint-Chiefs of Staff. The two met in Hong Kong.

Chung showed no caution. A month later, he introduced Liu Chaoying to Bill Clinton at a democratic fundraiser in southern California.

Chung later wrote of the moment, “I knew this was a tremendous business opportunity. I also knew this woman’s family connections, but to me it was no different than if I was dealing with someone like the daughter of then-U.S. Gen. Colin Powell.”

Liu was impressed by the entree. She set up a meeting between Chung and a friend of hers, Major-General Ji Shengde. Chung didn’t realize Ji’s identity at the time, but he was in charge of military intelligence for the People’s Liberation Army. Ji organized a payment to Chung of $300,000.

And the money did not stop at Chung. It kept going to the DNC. In total Chung donated 366,000 dollars to the Democrats.

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At the same time, American corporate interests were also lobbying Clinton for aerospace engagement with China.

In 1996, a Chinese rocket carrying an American satellite owned by SpaceSystems Loral veered off-course after take-off. It flew into a hillside village and exploded with a force of around 20 tons of TNT. Villagers woke up at the explosion and found that over a hundred of their neighbors had been killed or injured.

The Loral satellite was in China on a Chinese rocket because in satellites, as in many industries, China operates with a cost advantage. Back in 1998, launching a satellite with a US-built rocket cost around $5,800 per pound. But on a Chinese rocket the cost was only $3,000 per pound.

The launch of that rocket in 1996 was controversial. As part of the sanctions placed on China after Tiananmen, US congress had banned American satellites from launching on Chinese rockets. But American companies could circumvent the ban by getting a special waiver, which is exactly what Loral did.

But the waiver came with its own controversy. Because Loral's CEO Bernard Schwartz was the biggest donor to Democratic candidates in the prior election cycle. Between Schwartz’s contributions on one hand and the backchannel contributions of the Chinese aerospace executive Liu Chaoying, it’s easy to develop a narrative that Clinton, US companies, and Chinese space interests were all in bed together.

And the controversy kept growing because of Loral’s reaction to that 1996 explosion. Of course, the company investigated the crash. And once they figured out what went wrong they shared the information with their Chinese partners. Everyone was trying to make sure that the next time they launched a satellite, it wouldn’t cost innocent lives and millions of dollars.

That may sound rational, even innocuous to you. But to American military and commerce officials, it was wrong. Because sharing the results of the investigation of the crash was a violation of export controls. In the eyes of the American bureaucracy, making sure that Chinese rockets bearing US satellites did not veer off course and explode, was analogous to aiding Chinese military development. And let’s face it, there’s a pretty solid case to be made there.

As a consequence of the violation, in 2002, Loral settled with the State Department to fines of $20 million. By 2004, at least least four US space industry companies had paid penalties related to aerospace commerce with China.

Johnny Chung, for his part, was eventually sentenced to five years' probation and community service after a guilty plea to bank fraud, tax evasion, and two misdemeanor counts of conspiring to violate election law.

Part 3: Elon Musks, Plural

I mentioned in Episode 2 that venture capitalist Peter Thiel’s book Zero to One sold over a million copies in China. I was trying to illustrate how interested Chinese are in the business of technology.

Among those influenced by Zero to One is a man named Shu Chang, who is the founder of OneSpace, a startup that is sometimes compared to Elon Musk’s SpaceX. I know that Zero to One influenced Shu because OneSpace’s Chinese name is LingDengKongJian, which, in a better translation, would not be OneSpace but ZeroOneSpace.

And if that’s not enough, this July, China’s government television network CCTV aired an hour-long documentary on Shu. Here’s Shu, speaking about his college experience starting a small food delivery business:

11:43 “But in the end it left me with the impression that I think I am a good fit for discovering demand and opportunity, and I have the ability to lead a group and go from nothing to something.”

A subtle detail here: The Chinese title of Zero to One is “From nothing to something.”

The documentary is a remarkable story of entrepreneurial pluck. In addition to his food delivery business, while at university Shu also tutored foreign students in calculus. He then interned at an aerospace investment fund and then joined Lenovo, but found himself unhappy.

His unhappiness coincided with government aerospace industry reforms. Private rocketry companies were now legal. And Shu wanted to start one. But he faced a few major obstacles.

23:28 - At the time I was 29. I said I wanted to make rockets. I didn’t have any money. I didn’t have any co-founders. I went to talk to friends in the industry, including my own good friends. Everyone thought, ‘Don’t you think that this is a little bit much? That you’re dreaming?’

But somehow Shu pulled it together. And just a few years after he founded OneSpace it launched its first rocket. Today, it has around 150 employees.

Remarkable as Shu’s story is, it’s not exactly unique. The Chinese space industry is filled with young people.

One interesting thing I learned about the Chinese space program is its youth. In a book by the space historian Brian Harvey, I learned that when Yang Liwei became China’s first astronaut in 2003, eighty percent of the engineers who designed his spaceship and controlled his mission were under 40. The average age of the staff of the mission control center was just 27!

By highlighting the space program’s youth, Harvey was trying to illustrate the brilliant prospects for China’s future in space. Today, the men and women who worked on that first manned space flight are in their fifties and sixties. They are the experienced professionals building China’s Tianhe-1 space station, which I mentioned in the introduction.

But the private space industry is much younger. Shu Chang, the founder of OneSpace, is in his early 30s. He founded the company at 29. And in 2017 his average employee was only thirty years old.

OneSpace’s competitors are similarly youthful. The founder of LandSpace, for example, was also founded by a man in his early 30s. Most jarring is LinkSpace, whose founder Hu Zhenyu was just 21 when he founded it in 2014. He was featured in Forbes 30 under 30 this year.

The CCTV documentary about Shu Chang and OneSpace features only a few minutes of an interview with an elder of the space industry. An effusive octogenarian gushes about the bright prospects for collaboration between the public space apparatus of old, and the young guns of private industry.

There is a stark divide between the older man and Shu Chang: old and young, public and private. One is a communist and the other venerates the famously libertarian Peter Thiel.

The two men seem to represent the old China and the new China. But a question has to be asked: Is that true?

Another characteristic of business of space exploration is its capital intensity. This isn’t software remember, where you can build a massive business with a few computers, some servers, and a smart team.

Satellite and rocketry companies need to raise and manage vast amounts of capital. Elon Musk, for his part, was able to raise money for SpaceX, largely because he had already proven himself by building PayPal, a billion dollar business. And then, of course, was the fact that he also invested huge amounts of his own money into those ventures.

In Shu Chang’s own words, he had no money and no team. His only prior entrepreneurial experiences were delivering food and tutoring calculus. But he would eventually raise 500 million renminbi. His 21 year old competitor over at LandSpace raised twice that.

I would be completely skeptical, except that there is some precedent for giving vast sums of money to unproven young men who like rockets. I mentioned it earlier in this episode, when the US military gave $3,000,000 of 1940s money to CalTech for rocketry research.

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One Chinese newspaper that interviewed Shu Chang asked him if he was building the Chinese SpaceX. Shu said no. He didn’t like the comparison to SpaceX. Instead, he wanted to build the Huawei of aerospace industry.

Shu explained that SpaceX is too ambitious. On the other hand, Huawei had no grand vision. Instead, Huawei concentrated on slowly creating excellent technology. Today, Huawei is a successful global brand. Shu doesn’t mention, Huawei’s founder and President Ren Zhenfei, is a former military officer.

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