US embassy cable - 04ROME1928

S E C R E T  ROME 001928 
 
SIPDIS 
 
 
STATE FOR PM/DTCP, NP/NPC/ECNP, EUR/WE 
DOD FOR SPACE POLICY - RITCHESON; DEFENSE TECHNOLOGY 
SECURITY/SPACE DIVISION - WALDING; C3I - MANNO 
JOINT STAFF FOR J-5 - WHALEN 
 
E.O. 12958: DECL: 05/18/2014 
TAGS: ETTC, PARM, PREL, TSPA, IT, CH, EXPORT CONTROLS 
SUBJECT: ALENIA SPAZIO AND CHINA - DETAILS ON CONTINUED AND 
FUTURE COOPERATION 
 
REF: A. 03 ROME 4744 
     B. 03 STATE 283728 
     C. 03 ROME 2977 
 
Classified By: Economic Minister-Counselor Scott Kilner for Reasons 1.5 
 (d) and (e) 
 
1. (S) Summary: Alenia Spazio (AS) CEO Maurizio Tucci and 
Director General Carlo Penazzi told emboffs May 13 that 
contacts between the company and Chinese space officials over 
the last six months had revealed several potential areas of 
further cooperation: telecommunications; manned space 
programs; and scientific satellites and moon exploration.  In 
a candid conversation over lunch with Ecmin, accompanied by 
Science Counselor and econoff, Tucci and Penazzi discussed 
Alenia Spazio's resumption of contacts in December 2003 with 
the Chinese Academy for Space Technology (CAST) and the 
Shanghai Academy for Space Technology (SAST). Tucci also 
passed to Ecmin a "company confidential memo" providing 
information on Alenia Spazio's activity with CAST and SAST 
from the December 2003 visit of Alenia executives  China up 
to the present.  Our discussion also covered Alenia Spazio's 
relationship with NASA and with ASI, the Italian space agency 
(reported septel). End summary. 
 
2. (S) Tucci, who visited China himself in early April 
(accompanying an EU delegation led by Research Commissioner 
Philippe Busquin), where he met with CAST president Jia-Jun, 
told us that he was impressed by the increasingly advanced 
technology of the Chinese space sector, especially in terms 
of launch capabilities. Rather than seeking to import whole 
systems, the Chinese were now interested primarily in 
importing components - Tucci specifically mentioned their 
need for microelectronics, such as those used in 
transponders.  Tucci added that the Chinese recognized that 
the company's ability to export sensitive goods and 
technology to China was constrained by Italian export 
controls. Overall, he said, Chinese officials' attitude on 
space technology was that China would eventually be able to 
produce such components domestically, regardless of foreign 
export controls. Tucci added that since talks resumed last 
December, AS has had no discussions with the Chinese on data 
relay satellites. He made no mention of any further talks 
with the Chinese on navigation systems, either. 
 
3. (S) According to the Alenia Spazio (AS) document given to 
us by Tucci, the December 2003 visit of AS executives to CAST 
and SAST was followed shortly thereafter (no specific date 
given) by the visit of a delegation from CAST's manned space 
division to Alenia Spazio's Turin facilities. AS employees 
made a return visit to CAST on March 30-April 1, 2004.   The 
document then provides Alenia Spazio's analysis of some 
technical and operational aspects of the planned cooperation 
in the following three areas: 
 
-- Telecommunications: CAST designated China Great Wall 
Industries Corporation (CGWIC) as the purchasing company for 
on-board telecommunication equipment (no further details were 
provided), as previously specified in a request for proposal 
(RFP) forwarded by CAST to AS.  On April 29, 2004, AS asked 
CGWIC to issue an end-user statement for the proposed 
equipment. In the meantime, AS contacted the GOI regarding 
the potential issuance of export licenses for the proposed 
items. AS believes these items are being procured 
competitively, with at least three other companies having 
been asked by CAST to provide a quotation. 
 
-- Manned Infrastructure: CAST confirmed its interest in AS 
technologies and products, including in the areas of 
shielding from micrometeoroids and debris; design and welding 
procedures for pressurized structures; and thermal controls 
for modules. 
 
-- Scientific satellites and moon exploration: CAST is 
interested in cooperating with AS on future scientific 
missions, particularly with regard to satellites to study the 
effect of solar activity on the earth's atmosphere.  These 
projects were being implemented in close cooperation with the 
 
 
European Space Agency and other national space agencies. CAST 
would also like to collaborate with AS in the development of 
a surface rover for lunar exploration. 
 
Though AS is interested in all three sectors outlined above, 
AS notes in the document that in all the areas except 
telecommunications, government-to-government (perhaps space 
agency-to-space agency) agreements would be needed to allow 
such cooperation to move forward. 
 
4. (S) Tucci told Ecmin that the brief (45 minute) visit of 
Chinese Premier Wen Jiabao to AS headquarters in Rome on May 
7 had been essentially a photo opportunity, with no business 
discussions taking place. He pointed out that AS had taken 
care to shield Wen and his staffers from seeing any sensitive 
equipment or operations (notably those connected to Cosmos 
SkyMed), adding that GOI officials had also pressed AS to 
ensure its facility was not compromised in any way by the 
visit. 
 
5. (S) Comment: Tucci continued to impress us with his 
willingness to share details of Alenia Spazio's contacts with 
Chinese space officials, including in a written document 
(which appeared to be drafted specifically for USG 
consumption). AS continues to look to China as an important 
element in reinvigorating the company's operations, though it 
appears in the near term that there may be fewer commercial 
prospects there for AS than was the case last summer. We 
expect to hear further details on AS discussions with China 
at the next round of bilateral talks on dual-use export 
controls, now being planned for June. End comment. 
 
Visit Rome's Classified Website: 
http://www.state.sgov.gov/p/eur/rome/index.cf m 
 
SKODON 
 
 
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 2004ROME01928 - Classification: SECRET