China's burgeoning commercial space industry: The race to catch SpaceX

China's burgeoning commercial space industry: The race to catch SpaceXChina is aggressively pushing the development of its commercial space industry, aiming to spark innovation and close the gap with SpaceX. Private companies are playing a key role in developing reusable rocket technology, driving both technological autonomy and reducing reliance on Western expertise

China's burgeoning commercial space industry: The race to catch SpaceX

China is aggressively pushing the development of its commercial space industry, aiming to spark innovation and close the gap with SpaceX. Private companies are playing a key role in developing reusable rocket technology, driving both technological autonomy and reducing reliance on Western expertise. Plans for at least six maiden flights of reusable rockets in 2024 highlight China's ambition in this area, marking a new milestone in the industry's technological self-sufficiency.

China has long viewed its space program as a successful example of high-tech self-reliance, demonstrating its ability to achieve technological breakthroughs with minimal external assistance. However, amid intensifying US-China competition, the need for self-sufficiency in areas ranging from semiconductors to AI has become paramount. At a meeting with private entrepreneurs in February, Chinese leaders emphasized the importance of building a competitive and innovative private sector, a policy actively reflected in the space industry. Attendees included representatives from companies like GalaxySpace, a satellite manufacturer. Significantly, for the first time since opening the space industry to private companies in 2014, commercial space activities were explicitly prioritized and included in the 2024 government annual report.

Lincoln Hines, an assistant professor at the Georgia Institute of Technology, notes that the Chinese government recognizes the limitations of relying solely on state-owned enterprises (SOEs) to compete effectively with American companies in space technology. He argues, "If China continues to rely primarily on SOEs to lead the space industry, while they might achieve grand goals like landing on the moon or manned spaceflight, they may struggle to match the US in innovation and competitiveness."

SpaceX, a global leader in rocketry, casts a long shadow. In 2024, SpaceX accounted for over half of all global orbital launches. Its successes provide a crucial benchmark for China's commercial space development. SpaceX's workhorse Falcon 9 rocket, equipped with reusable boosters, dramatically reduces launch costs, allowing for more competitive pricing. Its most-flown booster has completed 26 flightsa remarkable feat. Furthermore, SpaceX has launched over 7,000 Starlink satellites and successfully recovered the massive booster used for its Starship launch in October 2024, despite losing the spacecraft in its latest March test.

Lan Tianyi, founder of Qianyu Aerospace Consulting, believes SpaceX's success has proven the sector's potential and viability to potential investors. He emphasizes, "This is particularly important in China's more cautious financing environment, also attracting cross-industry talent into the space sector." The space industry, once dominated by military and research applications, is playing an increasingly prominent commercial role. Smartphone manufacturers are already offering satellite communication servicesfor example, Apple's iPhone SOS function allows emergency calls in areas without cellular coverage, demonstrating the vast potential of commercial space applications.

LandSpace is one of China's leading private reusable rocket companies. In 2023, it achieved the world's first launch of a liquid oxygen-methane propellant rocket, a technology later adopted by SpaceX's Starship, showcasing the innovative capabilities of Chinese private space enterprises. Another company, Galactic Space, was founded by Yao Song, who sold his chip startup at the age of 20 for $250 million, highlighting the entrepreneurial passion and capabilities of China's younger generation in high-tech. Shenlan Aerospace founder Huo Liang worked at the state-owned China Aerospace Science and Technology Corporation (CASC) until SpaceX's first successful booster recovery in 2015 spurred him to leave and found his own company focusing on reusable rockets. Shenlan Aerospace plans to test the recovery of its "Xingyun-1" first-stage rocket later this year and conduct suborbital space tourism by 2027, with single-seat tickets exceeding $100,000. Huo Liang is confident that Chinese space companies could surpass SpaceX technologically around 2030.

Brian Curcio, founder of Orbital Gateway Consulting, a Hong Kong-based research firm focusing on space and satellite communications, believes that due to SpaceX's continuous innovation, this timeline might be longer. Furthermore, Curcio points out that China's private space companies are acutely aware that the majority of government business will go to SOEs, thus requiring greater efforts to stand out in a fiercely competitive market.

On the international launch market, Chinese SOEs are also actively competing. In November 2024, CASC launched a remote sensing satellite for Oman, its first international payload launch, signifying the growing influence of Chinese space technology on the global stage. Curcio predicts that around 2030, Chinese private space companies will directly compete with SpaceX in launch services. After SpaceX, the most launches last year were conducted by the Chinese state-owned China Aerospace Science and Technology Corporation (CASC) with 51 launches, compared to SpaceX's 134, indicating significant room for growth in the Chinese space industry. It's noteworthy that Chinese rockets have yet to achieve reusability, limiting their cost and efficiency competitiveness. China also experienced some launch failures last year, including the misfire and explosion of a rocket developed by the private company Tianbing Technology, which, though causing no casualties, damaged nearby houses, highlighting the need for greater caution and stringent safety measures in space technology development and application.

Currently, at least two Chinese companies are competing with SpaceX's Starlink satellite business: State Grid and Qianfan. The latter, backed by the Shanghai municipal government, has signed agreements with Malaysia, Kazakhstan, and Brazil to provide satellite communication services, indicating an accelerating commercialization of China's satellite communication sector.

Huo Liang sees SpaceX as an industry beacon, stating, "To catch up with world-leading technology, we still have a long way to go." This aptly summarizes the current state and future direction of China's commercial space industry: In the race to catch SpaceX, Chinese companies must continuously innovate and overcome challenges to ultimately achieve technological parity. It is a journey fraught with challenges, but also brimming with hope.