Boeing Co. said Thursday it was canceling a controversial satellite order that was financed by a Chinese government-owned firm, citing “default for nonpayment.”
Boeing’s decision follows a Wall Street Journal investigation this week that highlighted China’s opaque role in funneling around $200 million to the project, called Global IP.
Under U.S. export-control laws, Boeing BA, -3.09% isn’t allowed to sell satellites to China directly. The company faced criticism after the article’s publication that it attempted to sidestep U.S. regulations of sensitive satellite technology, which the U.S. military relies on.
A person familiar with Boeing’s thinking said canceling the Global IP order was a “business decision.” The person said the satellite, which had been nearing completion at a Boeing facility in Los Angeles, would likely be resold in the future.
An expanded version of this report appears on WSJ.com.
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