 Recent federal budget cuts have reduced funding for the U.S. space program, NASA.In the midst of NASA’s descent, China has been building a robust space program. The China National Space Administration was formed in 1993 in Beijing under the control of the Ministry of Aerospace Industry (2). In the last decade, the program has expanded 10% annually and has proposed substantial goals for the future (1). On October 16, 2016, China will launch their sixth crewed mission. Chinese astronauts will board the Shenzhou-11 for a 30-day exploration to map out plans for China’s new space station (3). The rise of the Chinese space program is noticeably threatening the dominance of the United States aerospace industry, and raising serious national security concerns for the U.S.
China’s National Space Administration has built its program with cost efficiency in mind, providing exceptional results at low costs. It is estimated that China spends 2 billion dollars annually on its space program, while NASA’s progress is declining even with an 18 billion dollar budget (1). China’s economically efficient rise to power is attributable to their ability to acquire and improve upon preexisting technologies. China’s relationship with Russia has allowed them to purchase rockets, which China has reverse engineered and upgraded. This process has allowed the Chinese Space Administration to skip many years of development and focus its work on creating the most cutting edge technologies. China’s innovative Long March rocket, for example, has now surpassed Russia’s rocket capabilities. A key component to the Chinese Space Administration’s success are the young and well-trained engineers that China has assembled who drive this remarkable innovation. The engineers of China’s space program appear predominantly focused on lunar exploration, a field of exploration that has been ignored by NASA for years as it has focused its attention on Mars instead (1). China’s launch of its Jade Rabbit in 2013 was the first landing of anything human-built on the moon in close to 40 years (1). This focus on lunar exploration, coupled with the Chinese Space Administration’s ties to Russia, are concerning to U.S. national security. According to a recent U.S. Department of Defense report, it is possible that China might be developing anti-satellite weapons to damage U.S. navigational satellites. Referring to a possible plot to undermine U.S. dominance in space, expert Paul Spudis notes, "All of that activity is classic space control. If you combine these activities with their anti-satellite warfare experience, it's pretty clear what they are up to. I think that's their real agenda (1).” Given the Chinese National Space Administration’s close relationship with the Chinese military, U.S. officials are becoming increasingly concerned that Spudis’ speculations will become a reality. In response to these mounting concerns, the U.S. has gone so far as to ban China from the International Space Station. Furthermore, NASA has imposed stringent restrictions preventing their employees from collaborating with China or letting Chinese Space Administration affiliates into U.S. facilities. It is rumored that China is looking to collaborate with Russia on their new space station, the Tiangong 2, which could be in orbit within the next two years. Estimated to become a fully functional lab by 2022, the 60-ton station may also feature a Hubble-style telescope. Within that timeframe, the U.S. Space Station will become obsolete and be removed from orbit, with no replacement planned at this time (1). Similar to the American business SpaceX, a private space company is also underway in China. Known as Expace, the firm has already committed itself to ten solid fuel rocket launches in the near future. Expace’s director is also the chair of China’s Aerospace Science and Industry Corporation, which is responsible for China’s missile defense system and anti-satellite weapons development programs. In February of 2016, China’s leading commercial space launch company was awarded 1.5 billion dollars from the Kuang Chi Group (4). The Kuang Chi group also funds a $1.5 billion dual purpose balloon called the “Cloud”. The Cloud will not only be capable of taking space tourists to the exo-atmosphere, but will also serve as a backup for China’s missile defense and satellite systems (4). In light of all these developments, China is on track to becoming a dominate player in the private as well as public space industries. In the decades to come, China’s government and private ventures—featuring relatively inexpensive leading edge rockets—may become leading global suppliers of space launch technology, leaving the U.S. with a lot of catching up to do. (1) Dickerson, Kelly. "China's Space Program Is Growing Extremely Fast." Business Insider. Business Insider, Inc, 16 June 2015. Web. 17 Oct. 2016. <http://www.businessinsider.com/how-big-is-chinas-space-program-2015-6>. (2) "China National Space Administration." Wikipedia. Wikimedia Foundation, n.d. Web. 17 Oct. 2016. <https://en.wikipedia.org/wiki/China_National_Space_Administration>. (3) Jones, Andrew. "China to Launch Shenzhou-11 Crewed Mission Late on Sunday." Gbtimes.com. N.p., 12 Oct. 2016. Web. 17 Oct. 2016. <http://gbtimes.com/china/china-launch-shenzhou-11-crewed-mission-late-sunday>. (4)Lin, Jeffrey, and Peter W. Singer. "China's Private Space Industry Prepares To Compete With Spacex And Blue Origin." Popular Science. N.p., 7 Oct. 2016. Web. 17 Oct. 2016. <http://www.popsci.com/chinas-private-space-industry-booms-prepares-to-compete-with-spacex-and-blue-origin>. Image: © Mike K. | Dreamstime.com - Yutu Lunar Rover
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 With full government support, China’s tech manufacturing businesses have leveraged their profits to evolve into the leading producers of cutting-edge microchip technology. Both government policies and consumer interests have stimulated innovation. Now China’s tech producers have developed a supercomputer that runs five times faster than anything built in the United States. Demolishing the competition from U.S.-based Intel, IBM, and Sun Microsystems, China boasts the two fastest supercomputers in the world and plans to immediately invest $150 billion more into research and development. Supercomputers have become the world metric of technological advancement because of their wide variety of uses. This 21st century tech race has been compared to the Space Race of the 20th century as supercomputers affect everything from science to national security. Although supercomputers are not a consumer product, their chip technology is quickly and inexpensively transferred into consumer applications. China’s 2014 era supercomputer blew away global competition using Intel-made chips, while their current TaihuLight machine uses only Chinese-made chip sets––the result, ironically, of the U.S. Commerce Department’s 2015 ban on Intel chip sales to Chinese supercomputer producers (1). The developers of the TaihuLight intend the newest machine to be used primarily for developing new advancements in manufacturing, likely placing U.S. developers further behind in the tech race. At the same time, Chinese supercomputer labs have developed software for these machines that might lack the polish and testing of U.S. products; however, technologically, these machines are several years ahead of products the U.S. has promised but not yet produced. China's tech development was unimaginable 10 to 15 years ago. With the sheer volume and speed of these new machines, China’s famous control over its domestic Internet content has also dramatically opened up. China is now allowing tremendous open Internet commerce, but unfortunately U.S. firms, such as Amazon, have had a hard time connecting with customers' preferences, giving the ongoing impression of a closed Internet. China is rapidly becoming notorious for using its supercomputers to scour and crunch big data across the global Internet.
Traditionally, China has been reliant on U.S. computer chip developers, like Intel, giving the U.S. control of supercomputer development. China’s rise in computing was unexpected and in record time. How does China have the two fastest supercomputers when their chip technology is arguably behind that of Intel? The United States' lead in chip technology is still significant enough to retain consumption from Chinese markets. Intel is the manufacturer of 91% of the chips for the machines on the list (2). But for how long will this be the case? With a large and growing consumer class, the Chinese chip market is important to U.S. firms. China’s aggressive plan will use a $150 billion investment in an attempt to capture 70% of the domestic market, while U.S. research funding has been decreasing. The U.S. government's only defense has been the prohibition of Intel's sale of Xeon processor chips to Chinese researchers. Supercomputers are basically hundreds of thousands of microchips looped together while your home computer is made up of about four chips. The sheer quantity of processors and not necessarily as much the quality of the processors creates the speed. Scientifically, the faster the simulation is modeled, the more precisely the data is generated. Creating another blow to U.S. equipment producers, Chinese supercomputer labs have developed their own software programs for their own hardware. Many new scientific developmental software applications are being written to run exclusively on the Chinese TaihuLight. Development of supercomputers, in both the U.S. and China, is the domain of government-funded programs not unlike the space program. The U.S. has ordered domestic, Intel-based supercomputers to be delivered in 2018 that exceed the speeds of the current Chinese machines; however, increased funding is now stalled in the Senate. “Massive domestic gains in computing power are necessary to address the national security, scientific, and health care challenges of the future,” said Rep. Randy Hultgren, a Republican from Illinois whose American Super Computing Leadership Act has twice been passed by the House of Representatives. “It is increasingly evident that America is losing [its] lead” (3). Of the world’s top 500 supercomputers, the U.S. has 165, while the Chinese have 167 systems (4). This disparity leaves the U.S. with considerable ground to cover, even if the Senate appropriates the funding. Although the development and testing of supercomputers appears theoretical and requires massive investments of government and tech industry capital, the broad implication of Chinese programs is the application of new chip technology in their consumer semiconductor chip business. Chinese-government-owned flash memory and DRAM chips manufacturers are due to be up and running in 2017 and Chinese officials claim to be building a machine that can process some quintillion operations per second, ten times faster than TaihuLight in 2020 (5). This will have a massive impact on the balance of future consumer chip sales and applications as the Chinese improve their quality and bring their manufacturing costs down. Also, U.S. chip manufacturers have focused on research and development of cloud-based computing for commerce applications, like Amazon and Google, rather than supercomputers that have more scientific applications. Also raising the stakes, the most important scientific applications include nuclear weapons development. In fact, Erich Stromaier, a physicist at the Lawrence Berkeley National Laboratory, maintains the list of the top 500 supercomputers. While the Chinese may be perfecting an update 1990’s style supercomputer that is the size of a warehouse and uses the same amount of power as 15,000 homes, the United States is at work creating an exascale supercomputer that uses twice the power and may have artificial intelligence capabilities but is still years from completion (6). The stakes are high in supercomputer development, whether they are used to develop consumer technology or science, ranging from health to nuclear defense. These machines need to remain on the cutting edge. (1)Barrett, Brian. "China’s New Supercomputer Puts the US Even Further Behind." Wired.com. Conde Nast Digital, 21 June 2016. Web. 17 Sept. 2016. <https://www.wired.com/2016/06/fastest-supercomputer-sunway-taihulight/>. (2) Ibid. (3) Barrett, Brian. "China’s New Supercomputer Puts the US Even Further Behind." Wired.com. Conde Nast Digital, 21 June 2016. Web. 17 Sept. 2016. <https://www.wired.com/2016/06/fastest-supercomputer-sunway-taihulight/>. (4) Ibid. (5) Ibid. (6) Barrett, Brian. "China’s New Supercomputer Puts the US Even Further Behind." Wired.com. Conde Nast Digital, 21 June 2016. Web. 17 Sept. 2016. <https://www.wired.com/2016/06/fastest-supercomputer-sunway-taihulight/>. Image: © Zainoudine Laguera | Dreamstime.com - Super Computer  On January 16, 2016, the European Union and the United States announced the easing of sanctions on Iran, after the International Atomic Energy Agency determined that Iran had met the requirements for the Joint Comprehensive Plan of Action (JCPOA) (1). These sanctions were initially put in place to economically disadvantage and harm Iran; in an effort to curb Iran’s nuclear weapons development, the JCPOA offers Iran an avenue to reenter the global economy. Since the International Atomic Energy Agency deemed Iran to be compliant with the guidelines of the JCPOA, the US, UN, and EU have jointly and individually loosened their sanctions on Iranian industries that could potentially promote the development of a nuclear program. The majority of those sanctions that have been relaxed apply to non-US citizens. Although there are still sanctions for US and non-US citizens, the list has now been shortened due to perceived Iranian compliance (2). US sanctions have also been relaxed for non-US companies run by US citizens since the introduction of a carve out labeled General License H. Furthermore, sanctions have also been loosened on certain goods through the allowance of specific imports through this general license (1). Due to these policy changes, Iranian officials have put plans into action to develop their consumer airline capabilities. With plans to invest over 27 billion dollars into commercial airline ventures, Iranian officials have encountered difficulties in obtaining financing, due to the remaining sanctions.
Few industries in Iran have seen increases in import and exports because of General License H regulations still in place. Iran has begun to export a few specialty items such as rugs and food goods. The most notable increase in Iranian imports has been in the aviation and aircraft parts industry; this has been made possible by way of specific licenses obtained through an application process within the carve outs (1). Despite sanctions lifted, there is still an excessive amount of liability that is involved in importing or exporting with Iran. Potential importers and exporters must do in-depth due diligence studies to prevent trading with restricted persons or groups. They must also be sure the trade items involved cannot be used in any way that could support or contribute to the building of a nuclear weapon (3). With these carve outs in the restrictions, and the potential liability of future Iranian military uses, many foreign exporters are justifiably wary of engaging in trade. The newly changed sanctions have been additionally controversial to international financiers due to the US jet aircraft technology. During the sanctions, Iran had been restricted to older versions of the 747’s. In order to compete with other Gulf States, Iranian officials are working towards implementing 7 different types of Boeing and Airbus jets. Financing is not the only concern over incorporating new jet aircraft models into the Tehran's Imam Khomeini airport (4). It will require increased infrastructure, demand, and marketing to accommodate the larger and more technologically advanced airplanes. In spite of the challenges to modernizing the Iranian fleet, low oil prices have incentivized the purchase of super-jumbo jets for Iran (5). Additionally, the commercial airline industry is ready for growth, as the sanctions suppressed the Iranian airlines through the refusal of parts and planes. Although there is strong competition in the Gulf, Tehran International Airport in Iran poses a great opportunity for growth, due to its populated location. Neighboring domestic competition will have a difficult time competing with a new Air Iran fleet. Though Boeing and Airbus have prepared dealings with Iran, the House of Representatives passed the Financial Services and General Government Appropriations Act in order to halt the deal. The first amendment passed by the House involves preventing the Office of Foreign Assets Control (OFAC) from funding Iranian planes. The second bars US financial institutions from financing planes with the potential of conversion to military aircraft (6). Airbus, a European based plane manufacturer, is subsequently restricted due to key components being manufactured in the US. The Appropriations Act is yet to be completed and still requires a vote from the Senate. With the average plane in Iran Air’s fleet nearing 27 years of age, nearly 1/3 of the planes are inoperable due to lack of parts from the embargo (6). In order to grow domestically, internationally, and within the Persian Gulf, Iran will need 400-500 planes in the next decade (7). With only about 140 operational jets, immediate action is necessary. Due to the immediate need for new planes, aerospace analysts are recommending that Iran leases planes in-order to avoid Boeing’s current backorder. With Iran’s rough political situation, investors are more hesitant with purchases and consequently more interested in leasing the planes. Boeing and Airbus have major restrictions that are not consequential to ATR, a European turboprop plane manufacturer. In February, a deal was finalized between Iran Air and ATR for 20 planes, with an option for another 20. With planes arriving in November, the turboprop planes are expected to increase domestic mobility. Nearing a billion dollars, ATR’s contract is the biggest finalized aircraft dealing for Iran since 1995. With another estimated 50 billion dollars stalled in US legislation, the Iranian government may have to reconsider their alleged support for the Islamic Revolutionary Guard Corps-Qods Force and other hostile groups in the region (9). Furthermore, many other companies are watching the ATR deal in order to determine the feasibility of doing business with Iran as a US based company. One of the obstacles being watched is whether or not Boeing will be able to carry out the sale of the planes without the use of the US currency or financial system. Though the US would like to restrict Iran from any object with possible military use, they cannot block every deal with Iran, as that would essentially render the JCPOA worthless. There is a fine line that must be drawn in order to allow for economic opportunities in Iran while keeping Iran disarmed. With the reduction of sanctions imposed due to the meeting of the requirements of the JCPOA, the Iranian government has made a bold effort to modernize their airline industry. Though Iran has met the JCPOA requirements, the relationship still must be treated as fragile for all parties involved. If the sanction reductions are reversed, over 50 billion dollars is at risk, due to the difficulty of repossession in a hostile country. Additionally, national security must be considered when giving Iran this much freedom, yet freedom will also give Iran the opportunity to rebuild economic stability lost during the embargo. With the vast amount of changes occurring, there are many ways US/EU/UN relationships could wind up going badly. Close attention is a necessity. (1) "Changes to Iran Sanctions Provide a Few Business Opportunities, but Many Hurdles." Changes to Iran Sanctions Provide a Few Business Opportunities, but Many Hurdles. N.p., 8 Feb. 2016. Web. 20 Aug. 2016. <http://www.shipmangoodwin.com/changes-to-iran-sanctions-provide-a-few-business-opportunities-but-many-hurdles>. (2) "Joint Comprehensive Plan of Action." U.S. Department of State. U.S. Department of State, 14 July 2015. Web. 20 Aug. 2016. <http://www.state.gov/e/eb/tfs/spi/iran/jcpoa/>. (3) "Joint Comprehensive Plan of Action." U.S. Department of State. U.S. Department of State, n.d. Web. 20 Aug. 2016. <http://www.state.gov/e/eb/tfs/spi/iran/jcpoa/>. (4) Hepher, Tim. "Doubts Grow over Airbus A380 Sale to Iran: Sources." Reuters. Thomson Reuters, 27 June 2016. Web. 20 Aug. 2016. <http://www.reuters.com/article/us-iran-a-idUSKCN0ZD2LJ>. (5) Reuters, and Fortune Editors. "Airbus Raises Plane Production, Boosted by Low Oil Prices and Iran." Fortune Airbus Raises Plane Production Boosted by Low Oil Prices and Iran Comments. Fortune, 23 Feb. 2016. Web. 20 Aug. 2016. <http://fortune.com/2016/02/24/airbus-production-iran-oil/>. (6) Zhang, Benjamin. "Boeing CEO: If We Can't Sell to Iran Air Then Nobody Can." Business Insider. Business Insider, Inc, 11 July 2016. Web. 20 Aug. 2016. <http://www.businessinsider.com/boeing-ceo-iran-air-order-farnborough-2016-7>. (7)Spanner. "ATR: Agreement with Iran Air Company for Ordering 20 Aircraft." Life in France. CHB44, 1 Feb. 2016. Web. 20 Aug. 2016. <http://chb44.com/2016/02/atr-agreement-with-iran-air-company-for-ordering-20-aircraft/>. (8)"Iran Air Signs Agreement to Buy Boeing 737, 777 Aircraft | The National." The National. Bloomberg, 21 June 2016. Web. 20 Aug. 2016. <http://www.thenational.ae/business/aviation/iran-air-signs-agreement-to-buy-boeing-737-777-aircraft>. (9)"ATR Denies Reports of Dialogue with Iran's Meraj Air." CH Aviation. N.p., 3 Feb. 2016. Web. 20 Aug. 2016. <http://www.ch-aviation.com/portal/news/43645-atr-denies-reports-of-dialogue-with-irans-meraj-air>. Image: © Alpiee | Dreamstime.com - EP-MMN Mahan Air, Airbus A310-304 Photo |
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