By Rob Watson
BBC defence and security correspondent
It has been described by some arms control experts as the beginning of a new arms race in space, pitting China against the United States.
The US military uses satellites to target enemy positions
Last week, according to US officials, China managed to destroy one of its own ageing weather satellites using a medium-range ballistic missile.
The satellite was some 500 miles (800km) above the earth.
At the very least, it represents the first significant escalation in the space weapons race in 20 years.
Only the United States and the former Soviet Union have previously destroyed targets in space and that was back in the 1980s.
Although this time China used a relatively old-fashioned ballistic missile to target the satellite, it is also thought to be working on far more sophisticated laser technology to do the job.
US officials have been alarmed by the test itself and the failure of China to announce what it was doing either publicly or privately.
A White House spokesman said the "development and testing of such weapons is inconsistent with the spirit of co-operation that both countries aspire to in the civil space area".
He said both the US and other countries were concerned.
Set alongside the recent dramatic increase in China's defence spending and the modernisation of its nuclear weapons and navy, to US officials the space test is one more worrying sign of Beijing's military ambitions.
The Pentagon recently warned in a report to Congress that China's military "is in the process of long-term transformation from a mass army designed for protracted wars of attrition on its territory to a more modern force capable of fighting short-duration, high-intensity conflicts against high-tech adversaries".
The report also noted that "China's military expansion is already such as to alter regional military balances. Long-term trends in China's strategic nuclear forces modernisation, land and sea-based access denial capabilities, and emerging precision-strike weapons have the potential to pose credible threats to modern militaries operating in the region".
And although tiny in comparison with US military budgets, Washington estimates China is spending $80bn (£40bn, 60bn euros) on defence, more than three times the official figure given by Beijing.
But why is the US so worried about anti-satellite weapons in particular?
Put simply the US military relies heavily on satellites to see and hear potential enemies and for its own communications.
So if China does indeed now have the ability to knock out targets in space, those capabilities are now under threat.
But on the issue of space weapons, the US certainly risks the charge of hypocrisy.
The US has also been carrying out research on lasers that could knock out enemy satellites and the Bush administration has repeatedly ruled out the idea of a global treaty banning putting weapons in space.
Only last August, President Bush laid out a new US national space policy which said Washington would "preserve its rights, capabilities and freedom of action in space" and "dissuade or deter others from either impeding those rights or developing capabilities intended to do so".
It also threatened to "deny, if necessary, adversaries the use of space capabilities hostile to US national interests".
To some extent the announcement of that policy was clearly a response to a perceived threat from China as well as an attempt to preserve the current US advantage in space.
It may be that last week's test is an attempt by China to push back at the US and put pressure on Washington to consider negotiating a treaty to ban weapons in space.