Liechtenstein’s planned satellite project is facing heavy criticism for the involvement of Chinese contractors and financers. The most ambitious space project the Principality has ever planned might stop before it even started.

“Liechtenstein goes satellite” is the most ambitious space project Liechtenstein has ever seen. The plan is to build a satellite-based system that enables companies to communicate in real-time with entities worldwide. As there would be no need for terrestrial lines, the exchange of data would be more efficient and secure. Industrial companies could use the network to manage production facilities worldwide, financial institutions, and logistics companies for global communications.

The goal is to launch 288 satellites in the first phase alone, and there is talk of an initial investment volume of four billion Euros. Yet so far, the “Trion Space AG” that stands to compete with the likes of Elon Musk and Jeff Bezos is a mailbox in Liechtenstein with no offices, no employees, no website, and about 25,000 Swiss francs in equity.

Criticism over Chinese involvement

What started with a Wow-moment is now increasingly facing criticism. A large chunk of the money and equipment is supposed to come from Chinese investors and suppliers, mostly from state-owned enterprises – some of them with connections to the Chinese defense and military sector.

Considering how sentiment and the relationship between China and the West have changed, experts fear Beijing might use the project to establish a technological bridgehead in Europe and pursue strategic economic and military interests. Not a good start to the project, although representatives of the project reject these claims.

The Vaduz-based newspaper Wirtschaft regional reported that several top researchers involved have worked in the official space program run by the Chinese military, received grants for military and defense research, or even have military backgrounds.

Besides all the criticism, there is no doubt about the technological feasibility of the project and certainly not about the economic need for satellite-based communication systems. Elon Musk’s Space-X is already pursuing similar plans with its Starlink project. Europe, however, has fallen behind on satellite technologies, as it has in so many other technological areas.

Technological opportunity but political risk

Liechtenstein has a chance to make a giant leap, for Liechtenstein but also for Europe. As a sovereign state, the Principality is entitled to radio frequencies needed for a satellite fleet. These frequencies are allocated by the International Telecommunication Union (ITU), and they are scarce and in hot demand. As Liechtenstein had not yet called up its quota, the provisional allocation was not a problem when the Vaduz Office of Communications (AfK) made representations to the ITU six years ago.

It would be a huge step forward for digitization in Europe, but there are doubts whether the initiators can handle the project technologically and financially. Capital was missing from the beginning, so the project initiators turned to China in 2018. Chinese financiers, mainly from Shanghai, stepped in big and took over majorities in participating companies and positioned their people in key positions such as on the board of Trio Space AG.

That connection has now become the biggest headwind for the project. Although the satellites are solely for civilian use and communications, there are geostrategic concerns. Liechtenstein is generally an investor-friendly place, but Vaduz is far from approving the project. The fear Chinese interests could harness the Principality is great. The German project participants have also started wrangling with their Chinese partners. No official statement was issued, but the project’s future is in question before it has even started.

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