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Very stupid of the Chinese to do this. It seems more like something North Korea would do if it could... "look what we can do!"
It was pure provocation. You don't get rid of your old satellites by blowing them up. You put them in a graveyard orbit or let them decay in one piece and burn up in the atmosphere
Now there are thousands more pieces of space junk up there to potentially hit other satellites (ours and theirs) the ISS etc.
It does give Bush a great reason to allocate more funds openly to the arms race in Space even though he says it doesn't exist.
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