A means of modern warfare the world had complacently come to see as at least informally off the table is now very firmly back on it – or, rather, scattered as metallic debris across miles of outer space.

China, in an alarming exhibition of its military muscle, has fired a ground-based ballistic missile into space to destroy one of its own weather satellites, hitting a 4 sq ft box at 530 miles and bringing to a dramatic end a two decades-long moratorium on the testing of weapons in space. Good shooting, yes, but is it good politics?

This experiment has drawn widespread condemnation. The US clearly sees it as part of an effort by China to develop anti-satellite capability that could threaten its extensive space assets. The Chinese test may or may not lead to a new arms race in space. But it will certainly strengthen the hand of hawks in Washington who regard Chinese power as a strategic threat to the US. Yet there is a long history behind this incident – and the leadership in Beijing is not known for foolhardy or precipitate action.

The last extensive use of anti-satellite weapons was by the US and former Soviet Union in the 1980s. The cold war slowly raged, heated up in 1983 by President Ronald Reagan with his Strategic Defence Initiative – the infamous Star Wars speech in which he announced plans to develop the capability to destroy missiles from space.

Those tests nonetheless ceased in 1985, not least because they created an uncontrollable fall-out of debris that threatened the network of satellites ever more densely carpeting the sky.

Both Moscow and Beijing subsequently made efforts to take space out of the military equation. The US, with a military budget able to outspend almost the rest of the planet put together, was simply not interested.

To the extent that it bothered to explain its position, Washington argued that the demilitarisation of space would be impossible to verify: a self-serving argument similar to the Bush administration’s reasoning for opposing the verification protocol of the Biological Weapons Convention.

In the past year, however, two developments may have rattled Beijing. First, the US nuclear co-operation agreement with nuclear-armed India is the clearest indication yet of Washington’s wish to build up a counterweight to China in Asia and the Pacific. But second, last summer the Bush administration came out with a new policy asserting that the US regarded space as important a dimension for the nation’s security as air or sea power. It may have been no coincidence that, within weeks, China ruffled American feathers by using a ground-based laser to illuminate a US satellite – and highlight its own reach into space.

The US is so dependent on satellites for surveillance, observation of the “battlespace”, communications and defence against any incoming missiles (or son of Star Wars) that it has reason to feel alarmed. The National Security Council on Friday called China’s test “inconsistent with the spirit of co-operation that both countries aspire to in the civil space area”.

Ideally, that remark would translate into a realisation that hyperpower exceptionalism – America’s sense of entitlement to rights it concedes to no ally, let alone competitor – comes at a cost. But the risk is that this episode will instead translate into a new surge of defence spending that will delight the arms industry but do nothing to enhance international security.