The United States in 1999 banned the export to China of satellites containing components and material covered under the US International Traffic in Arms Regulations. As five US satellite manufacturers practically dominated the global satellite export market, China was forced out of the commercial launch market.

It was not until 2005 when China managed to re-enter the commercial launch market against the trade barrier by launching satellites manufactured by European companies without components controlled by the US regulations.

In 2004, China Great Wall Industry Corporation beat other bidders and signed a contract to build and launch Nigeria's first communication satellite, Nigerian Communication Satellite-1. Nigeria became the first foreign buyer of both Chinese satellite and launch service. But the satellite, which was launched in 2007, failed in orbit 18 months later due to malfunctions of the solar array deployment assembly.

"The failure is unfortunate both for us and Nigeria," said He Xing, vice-president of China Great Wall Industry Corporation, and the one in charge of the Nigeria communications satellite project.

For Nigeria, the satellite was urgently needed to boost Nigeria's and Africa's telecommunications. For China, since Nigeria is the first foreign buyer that purchased China's satellite, the failure of the satellite could damage China's reputation in the global satellite export market.

"We cherished the relationship and trust (Nigeria gave us), so we decided to take the responsibility, building and launching a replacement satellite with no additional cost to Nigeria," He said.

As the insurance claim was not enough to cover the cost, Chinese contractors made up the difference.

Ahmed Rufai, CEO of Nigerian Communications Satellite Ltd, said that Nigeria highly appreciated China's decision, believing it to be "a win-win philosophy for both China and Nigeria".

He believed that the attitude China took in handling the incident has attracted more countries, including Pakistan, to trust China to build and launch their communications satellites.

Nigeria is also considering cooperation with China to develop two more communications satellites, Rufai said.

In the future, Yin said, the company will be involved in more international cooperation thanks to China's growing space capacity.

China has plans to assemble a space station by 2020, and is also working on the Beidou (or Compass) satellite navigation and positioning system, which will provide navigation, timing and short message services in the Asia and Pacific region by 2012 and will be capable of providing global navigation services by 2020.

Yin said that the market for the satellite navigation system application will not be smaller than that of commercial launches and satellite exports.