On July 1, 2021 — the 100th birthday of the Chinese Communist Party (CCP) — General Secretary Xi Jinping declared China will “advance peaceful national reunification” with Taiwan.
Not long ago, that’d easily be dismissed as rhetoric. And not just the “peaceful” part. Now, Chinese state media reports that its military conducted assault drills near Taiwan. It also aims to paint the U.S. as a “weak and unreliable power” following the chaotic withdrawal from Afghanistan. The Global Times — a tabloid under the auspices of the CCP’s flagship People’s Daily newspaper — is warning “rogue province” Taiwan that, in the event of a confrontation with the mainland, the U.S. would also abandon its longtime ally.
Taiwan has accused China of wanting to “emulate” the Taliban. On Twitter (Nasdaq: TWTR), Joseph Wu, Taiwan’s foreign minister, thanked the U.S. for its ongoing support and said, “We’ve got the will & means to defend ourselves.”
China is mobilizing warships and planes. But its ground game aren’t its only — or even its most powerful — weapons.
Its rapidly advancing anti-satellite (ASAT) capabilities that could deter U.S. intervention on Taiwan’s behalf without even firing a shot.
Despite American space dominance, the U.S. is at a huge disadvantage compared to its adversaries … because it depends so much more on space for all kinds of things.
Heck, even banking and investing rely on satellites.
According to U.S. Space Force Col. Miguel Cruz:
The standard American people will probably use space 20 to 30 times between the moment they get up to the moment they have breakfast.
As for the U.S. military, satellites help warships and aircraft navigate and communicate … help smart bombs and missiles hit their targets … and monitor threats on land, sea and in the air.
That’s why the CCP is planning to leverage America’s space vulnerability.
Whoever Dominates Space, Dominates the World
China’s growing arsenal of space weapons now includes missiles, cyberweapons, satellite jamming devices and high-powered lasers designed to blind satellites from the ground as they pass overhead.
“Kidnapper” satellites are capable of rendezvous and proximity operations (RPOs) that can literally pluck satellites out of orbit … or disable them by bending or disconnecting their solar panels and antennas.
Paul Szymanski, an author and researcher specializing in space strategy, said:
I was surprised that [the U.S. is] already admitting that China has these inspector satellites with manipulator arms. If you’ve got something like that, you can do just about anything.
Not only that, but a prospective attacker could also preposition — during peacetime — as many spacecrafts as they wish. As close as they wish. To as many high-value targets as they wish.
The result?
• Sudden, out-of-the-blue attacks on our vital space assets.
China has conducted at least half a dozen RPO tests since 2008, two of which went on for years.
And SpaceNews reports China is planning to loft a 13,000-satellite national internet megaconstellation. It’s not unreasonable to think China could slip in a few hundred ASAT craft at the same time.
• As the CCP continues ASAT launches disguised as rocket tests, it’s also cooperating with longtime space expert Russia.
In the 1970s, the Soviet Union successfully mounted a bomber-defense gun to a satellite and performed the only publicly known test fire of a ballistic weapon in space.
And, like China of late, Russia was caught last year testing a new space-based ASAT weapon.
Russia Also Poses a Problem to
Neighboring Territories … and the United States.
Russia’s also deploying “kamikaze” satellites capable of ramming and destroying U.S. space assets. And its new “nesting doll” weapon — named after the famous Russian doll that opens up one inside the other — is another threat.
Says Gen. John “Jay” Raymond, Chief of Space Operations for U.S. Space Force, about Russia’s 2017 test of this weapon:
It opened up and another satellite came out. And it opened up and a projectile came out. That projectile is designed to kill U.S. satellites. So, in 2019, they did the same thing, but this time they put it up next to one of our satellites … there’s no rules in space. It’s the wild, wild west.
Both Russia and China also have directed-energy weapons, which can damage or disable satellites from a distance.
• Yes, my friend, “Star Wars” — lasers in space — has arrived.
With American space assets threatened, if China makes a move on Taiwan … the United States would face a conundrum: Decline to intervene, potentially leading allies to follow suit and Taiwan to succumb without a fight … or start a war that would be long and bloody at best.
Fortunately, America’s satellites are now being designed with:
• Greater maneuverability.
• Shielding to block directed-energy weapons.
• And resiliency by using thousands of replaceable, low-flying satellites so that losing one or a few doesn’t disable the system.
That’s defense. But what about offense?
Rumors are the Pentagon is debating whether to reveal a “top secret space weapon.”
Brian Weeden of the Secure World Foundation explains:
My sense is this is something that could interfere with the targeting system of an attacking satellite or space weapon, perhaps by jamming its communications or using lasers to dazzle its radar and optical sensors.
A good way to get some exposure to some of the inevitable, massive defense spending I see coming is with the so-called space exchange-traded funds (ETFs) like these:
Ark Space Exploration & Innovation ETF (BATS: ARKX)
This fund — managed by world renowned investor Cathie Wood — invests in domestic and foreign companies engaged in space exploration and innovation such as satellite and launch vehicles, 3D printing, artificial intelligence (AI) and robotics.
Plus, companies that benefit from aerospace activities, including agriculture, global positioning systems and drone manufacturers. Top holdings include Trimble (Nasdaq: TRMB), Ark 3D Printing ETF (BATS: PRNT), Iridium (Nasdaq: IRDM), Kratos Defense & Security (Nasdaq: KTOS) and L3 Harris Technologies (NYSE: LHX).
Expense ratio: 0.75%
Procure Space ETF (Nasdaq: UFO)
This fund tracks the S-Network Space Index, an equity benchmark for a globally traded portfolio of companies engaged in space-related businesses like satellite technology. Top holdings include Garmin (Nasdaq: GRMN), Globalstar (Nasdaq: GSAT), Trimble, Iridium and DISH Network (Nasdaq: DISH).
Expense ratio: 0.75%
iShares U.S. Aerospace & Defense ETF (BATS: ITA)
The fund tracks the Dow Jones U.S. Select Aerospace & Defense Index. Top holdings include Raytheon (Nasdaq: RTX), Boeing (NYSE: BA), Lockheed Martin (NYSE: LMT), Teledyne and L3 Harris Technologies.
Expense ratio: 0.42%
The catch-22 of so-called “peaceful reunification” on the one hand — and catastrophic Chinese miscalculation on the other — looks entirely preventable! But until we get there, look into these ETFs for growth opportunities.
All the best,
Sean
