As an aside, how does the US government make money from the GPS? As a consumer, I pay no money, so I can only assume the GPS chip manufacturers pay some sort of royalty fee?
I think it's more a matter of national pride issue: to show the world that China doesn't have to rely on the US for technology. Russia's GLONASS system (briefly referenced in the article) is more or less the same thing. The good news is that this system, like GLONASS, will likely improve positioning speed / reliability, since there will be more navigation satellites in the sky. Already, receivers can tie GLONASS and GPS together; it's only a matter of time before Beidou is integrated as well.
Do they? What would the royalties be for, licensed chip design?
Or, rather, you will have. If the project ever finishes.
The military retains control (which is why other nations are still working on their own systems), but this really was a remarkable act of generosity by the US government.
I don’t have the RF/SP domain knowledge to back this up, but I speculate that multiple low-end receivers for 2–4 of these networks on a single chip might be more useful in practice than a single good receiver for any one network. In other words, a $20 Galileo chip + a $20 GPS chip might give me a faster time-to-fix than a $40 GPS chip. (In terms of units shipped, most GPS goes into phones, where time-to-fix is way more important than centimeter accuracy.)
I wouldn't be surprised at all if China does something similar with Beidou and mobile phones sold in China.
Faster time to fix translates into longer battery life. Whether this matters in practice for much of the Continental US I don't know.
For one, neither Beidou nor Galileo are operational GNSSes, so there is no economic incentive to create receivers that work with those services.
Also, the Chinese government only just today published Beidou's ICD, the document that specifies the open-access Beidou signals: http://www.insidegnss.com/node/3331
And my point was that no one who isn't compelled to use only the Chinese system need trust the Chinese system - for most navigation consumers around the world Compass will be there to provide redundancy and to make the error bars smaller.