According to Defence News, the Chinese are testing their ability to blind the spacecraft although it was not clear if the ground-based laser was successful in dazzling the spy satellites.
However the Chinese moves have got the US a bit worried. Russian attempts to jam GPS satellites have so far been cracked by US boffins. But if a satellite's hardware could be damaged by a high-powered laser it could cause problems.
The Pentagon has been told not mention the Chinese ability it because the Bush administration does not want to Nintendo off Beijing, which seen as key to dealing with states like North Korea and Iran.
Apparently, a report in which it was mentioned was hacked down to a single line which said that "China has the ability to blind US satellites, thanks to a powerful ground-based laser capable of firing a beam of light at an optical reconnaissance satellite to keep it from taking pictures as it passes overhead." µ
L'INQ
Defense News