China's Jan. 11 test of exoatmospheric missile interception is worth paying attention to—especially in Washington. It isn't just an early step toward development of a missile-defense system; it's also a signal of a radical change in the country's stance on the militarization of space. The United States should take this as a wake-up call that in the long term, China intends to challenge its strategic superiority in aerospace.

The People's Liberation Army publicly unveiled its new strategy as part of the Air Force's 60th anniversary in November last year. It appears that this strategy was formulated in 2004, but the world did not learn about it until PLA Air Force Commander General Xu Qiliang summarized it as "effecting air and space integration, possessing capabilities for both offensive and defensive operations."

Meanwhile, Chinese diplomats continued to hew to the line set down in 1985 by the late leader Deng Xiaoping, when he told former U.S. President Richard Nixon that China "is against whoever goes in for development of outer space weapons." China started an intensive diplomatic and propaganda campaign against American missile defense programs. Most recently Beijing added its vocal assistance to Vladimir Putin's intimidation campaign, which succeeded in helping to convince current U.S. President Barack Obama to reverse his predecessor's commitment to build ground-based defenses in Europe against Iran's Chinese-aided nuclear missile threat.

Today, China is beginning to shed the cloak of deception over its own missile-defense efforts, and has all but declared its intention to build an aerospace power to rival that of the U.S. After General Xu's statements, Chinese media commentaries explained that the new aerospace strategy emerged from Communist Party leader and PLA commander Hu Jintao's December 2004 call for the PLA to implement new "historic missions," which include defending China's international interests. The PLA Air Force in particular will shift from being a "campaign air force" for theater-level wars (such as against Taiwan) in cooperation with the Army, Navy and Second Artillery missile force, to a "strategic air force" increasingly capable of independent action farther from home.

Of particular importance is the PLA's willingness to publicly justify a space combat mission. While it is not yet clear which service will lead this mission, the PLA Air Force is the most vocal booster. In an Oct. 31 interview, General Xu stated that "competition among armed forces is moving toward the space-air domain and is extending from the aviation domain to near space and even deep space . . . having control of space and air means having control of the ground, the seas and oceans, and the electromagnetic space, which also means having the strategic initiative in one's hands . . ."

General Xu's candor forced the Foreign Ministry to inveigh the following month: "We oppose the weaponization of outer space or a space arms race . . ." But even some Chinese scoff at this self-serving propaganda. Also in November, a Chinese military expert stated that as long as "hegemonism" (code for the U.S.) maintains primacy in space, "air-and-space non-militarization is merely people's naive illusion, or just a slogan and banner."

This isn't the first warning to Washington. In 2006, the PLA used ground-based lasers to "dazzle" a U.S. satellite, and in January 2007 demonstrated a ground-launched satellite interception. Last November, Chinese experts noted that the PLA may develop "assassin" satellites and "laser-armed" satellites, and reported China may already be developing an "orbital bomber." The PLA may also consider placing military assets on the moon—the first "Chang'e Three" moon lander may be equipped with a small radar and laser range-finder for "scientific" missions. The strict military-civilian "dual use" policy governing China's space program may mean that future larger unmanned Moon bases could be used to locate and target U.S. deep-space satellites that provide warning of missile strikes.

It's already public knowledge that China is now developing or deploying four new nuclear-armed intercontinental land-mobile and sea-based nuclear missiles. The key variable is whether the PLA will equip these missiles with multiple warheads, as some Asia sources have suggested to me, which could conceivably allow China quickly to achieve 400 or more warheads. These same sources also estimate a national missile-defense capability could emerge before the mid-2020s.

China is upgrading its aerospace capabilities closer to earth, too. Since the November PLA Air Force anniversary, PLA leaders have stated that China's fifth-generation fighter could fly "soon" and be in service by 2017-19, exceeding a recent U.S. government estimate by about a decade. Other Chinese sources speculate the PLA may build 300 of these fighters.

As China signals its intention to build space-combat capabilities, increase the size and survivability of its nuclear missile forces, and build new fifth-generation air combat systems, the Obama administration is signaling retreat on the same fronts. Having declared his disdain for "Cold War" weapons in early 2009, it is unlikely that Mr. Obama will begin U.S. space-combat programs that could match and deter China in space. If anything, in fact, U.S. officials convey an indifference to China's aggressive intent. In early 2009, Mr. Obama reduced the limited number of ground-based missile interceptors to be based in Alaska and terminated a theater missile-defense program to enable one interceptor to shoot down multiple warheads. By August, the administration had defeated a Congressional attempt to extend production beyond 187 of the Lockheed Martin F-22, the premier U.S. fifth-generation jet fighter.

Continuing this course risks sacrificing the air superiority in Asia the U.S. has purchased through great sacrifice. If the PLA is able to attack U.S. space assets, it can limit the U.S. military's ability to detect and respond to PLA movements. Should China decide to increase its warhead numbers to the hundreds and defend them, the U.S. nuclear deterrent extended to Japan and other allies will lose its credibility. And if a larger number of PLA fifth-generation air-superiority fighters is able to overwhelm a lesser number of U.S. F-22s, then U.S. naval forces and bases in the Western Pacific will be more vulnerable to PLA air and missile strikes.

As a new U.S. administration tries to "move beyond the Cold War," primarily by limiting U.S. military power, China is signaling its intent to start an arms race. An American failure to respond would constitute a retreat from leadership. Asians will then face two unpalatable choices: accommodate China or obtain their own military deterrence. Both would increase political instability and in turn threaten the region's economic growth.

**Mr. Fisher is a senior fellow at the International Assessment and Strategy Center in Alexandria, Va.