What’s the state of China’s ‘space economy’ as commercial launches intensify?

Chasing the success of SpaceX, China’s commercial space industry is eyeing lofty gains despite setbacks and technological constraints

Your daily must-read of essential stories from China, including politics, economy and current affairs China’s first commercial spaceport, in Hainan province, is capable of supporting 16 launches per year. Photo: Xinhua

China’s commercial space players have had a busy year, with the number of lift-offs in the first three quarters already exceeding the 2023 total as the industry surges skyward.

China achieved 27 commercial launches between January and September, compared with 26 such launches in all of last year, according to a tally by Beijing-based Taibo, a think tank and service platform for the nation’s space and geospatial information industry.

And amid soaring market demand, a report by the Shenzhen-based consultancy Askci Corporation has predicted that the size of China’s commercial space industry will skyrocket to 6.6 trillion yuan (US$906.4 billion) in 2029, which would be an elevenfold increase from 600 billion yuan in 2018.

The 4 billion yuan complex consists of two launch pads, each capable of supporting 16 launches per year, according to state media.

WATCH LIVE: SpaceX attempting first-ever commercial spacewalk

More private launches are being arranged by start-ups such as Galactic Energy, CAS Space, and Orienspace.

But China remains a laggard in the new commercial space race, relative to the United States, whose innovation and commercialisation are being led by Elon Musk’s SpaceX.

SpaceX attained its 100th flight of the year in October thanks to its workhorse Falcon rockets. Many of the catapulted satellites will form a seamless global broadband network known as Starlink. Moreover, SpaceX’s Polaris Dawn mission sent a four-person civilian crew into space in September and achieved the first commercial spacewalk.

The US Federal Aviation Administration announced in November that it had approved “a record 148 licensed commercial space operations” in fiscal year 2024—an increase of more than 30 percent over last year.

The FAA has also kicked off a review of rules for granting commercial-space launch and re-entry licenses to streamline processes and accommodate the booming market in the US.

Analysts say China has been left in the wake due to technological constraints such as rocket reusability, as well as state dominance in space industries. There is a lack of meaningful competition and innovation from private entrants, and thus a lack of vitality and innovation

Xue Xiaorong, Fudan University

“Unlike China, private aerospace companies such as SpaceX show unlimited potential under the open, vibrant public-private partnership in the US,” Xue Xiaorong, an associate professor of public administration with Fudan University in Shanghai, said at a seminar on space-economy governance in September. “[Such a partnership] can allocate resources more efficiently to meet market demand and to trial and popularise new technologies.

“The US’ experience in commercialising space flight is significant, globally.”

And while he pointed out that “China has made achievements in the state-planned vanguard,” pointing to its Tiangong space station and advancements in lunar exploration, “commercialisation is slow.”.

“There is a lack of meaningful competition and innovation from private entrants, and thus a lack of vitality and innovation,” he explained.

Calls have been made for Beijing to boost the size of the commercial space market and unleash its potential as China plays catch-up, but there have been worries following an explosive setback and in the face of government oversight.

In June, the accidental launch of the Tianlong-3 rocket by private aerospace company Space Pioneer resulted in a massive explosion near the testing facility in Henan province.

Private Chinese space rocket crashes and explodes after accidental launch during test

And in August, Vice Premier Zhang Guoqing stressed the need for stricter oversight and emergency management as he inspected launch facilities in Hainan. However, Zhang vowed that Beijing would help private space companies align with national strategies.

Meanwhile, local governments are still jumping on the bandwagon to capitalise on the “space economy” in their search for new development impetus. Numerous local authorities have rolled out plans and incentives to woo and nurture private space firms, with ambitious goals of mirroring the success of SpaceX.

Beijing and Shanghai, as well as the provinces of Guangdong and Jiangsu, boost the biggest clusters of space start-ups. In a document published in January, the capital city touched on plans to lead the nation in rocket reusability and constellation-building breakthroughs by 2028.

Li Guoping, chief engineer with the China National Space Administration, speaking last month at the China Air Show in Zhuhai, offered assurances that private players could expect “greater space and more business” in a new national plan being drafted.

“Commercial aerospace enterprises are encouraged to take part in national projects, such as in engineering, new product R&D, and other advanced technologies,” Li said. “We will also broaden the channels for them to get orders in the government procurement of aerospace services.”