Discover more from The Asianometry Newsletter
Can China’s Space Startups Challenge SpaceX?
A Brief Overview of China’s Private Space Industry
Author’s note: If you want to watch the video, it is below:
I am not a rocket enthusiast so this was pretty interesting to me. I have been thinking about a future video about this idea but nothing has really come to mind. I did notice that China is starting to build its own permanent space station which is pretty interesting, but that is in the early stages.
China’s national space industry is pretty complicated. There are entire books written about its structure and how it works. The fact that two of the major aerospace companies basically have the same English name is just the tip of the iceberg.
I was really intrigued to learn that Chinese rockets carried American satellites up to space once upon a time. Harkens back to a time of friendlier relations.
If you want to help support the channel, I recommend taking a look at the Early Access Patreon tier. I have never felt comfortable asking for something for nothing so I created this tier where people can watch unreleased videos first before everyone else.
The backlog of Early Access videos is quite large. Right now there are over 20 on topics as diverse as Japan stock purchases, Malaysia’s semiconductor industry and more. Check it out today.
There is just something about SpaceX that really grabs people's attention. Whether it is the Elon Musk connection or the allure of space, the company has a thriving culture around it.
The company’s success and media praise has spurred on a bevy of competitors. These are well covered in the media and I suggest you watch a few videos about them.
But SpaceX has also spurred the Chinese government and nation into action as well. There are over a hundred Chinese commercial aerospace companies right now in the industry competing amongst each other to be China’s SpaceX.
In this video, we are going to look at the rapid development of China’s private space industry.
Reform and Birth
Up until about 2014, all commercial space operations had been conducted under the auspices of the government. China Great Wall Corporation, founded 1980, was the sole commercial organization authorized by the Chinese government to provide commercial launch services.
China Great Wall briefly worked alongside American companies like the Hughes Aircraft Company in the 1990s on commercial projects. Their launch service prices were around $30-55 million in 1990 dollars ($60 million to $110 million today). This pricing drastically undercut the market by 50-75% and was criticized as being government subsidized dumping.
The work China Great Wall did with Hughes showed great potential for China's launch services industry. But the company found itself shut out of the American market due to government sanctions. They had been found to be diverting launch vehicle technology for weapons manufacture.
The company thereafter found a niche market helping to launch satellites for countries in the global South. Since then they have won contracts from Nigeria, Bolivia, Venezuela and Pakistan for various satellite launches. Many of these projects were funded with loans from China's various state development banks.
In 2014, the State Council issued its "Guiding Opinions on Innovating Investment and Financing Mechanisms in Key Fields to Encourage Social Investment". It for the first time proposed the encouraging of private capital to participate in China's civil space architecture:
Efforts shall be made to improve policies on the civilian remote sensing satellite data, strengthen the government's procurement services, encourage the private capital to be used to develop, launch and operate commercial remote sensing satellites and provide market-oriented and professional services, and guide private capital's participation in the construction of satellite navigation ground application system.
The State Council's "Made in China 2025" national plan encouraged and guided the entrance of private capital into the aerospace industry "in an orderly manner". So thus began China's search for a SpaceX competitor.
China's Space Startups
China's first officially private space launch company was Lingke Aerospace in 2014. Better known as LinkSpace (翎客航天). LinkSpace was founded by Hu Zhenyu, a graduate of South China University of Technology.
Born in 1993, Hu was inspired by SpaceX's success. The same year of the Falcon One's successful launch, Hu set off explosives in his classroom and a few years later organized a bunch of college rocket enthusiasts to launch a small rocket in Inner Mongolia.
Other companies soon entered the market, fueled by institutional investment money. Prominent names include i-Space (星际荣耀, literally "Star Glory" or "Interstellar Glory"), LandSpace (蓝箭, literally "Blue Arrow") and OneSpace (零壹空间, or literally "Zero One Space"). The multiple names in both English and Chinese must confuse a lot of people. It certainly did for me.
Many of these companies come from China's impressive national space program and bring a bevy of talents from it. As a result, over half of these companies are headquartered in Beijing but conduct their launches deeper within the country.
For these space launch startups, what matters is not about your passion or your team or your cool background. It is whether or not your rockets will fly. As of this writing, two of the companies I mentioned have successfully launched rockets: i-Space and OneSpace.
The first suborbital attempt happened in April 2018 by i-Space with their Hyperbola-1S. This single-stage solid-fuel suborbital rocket took off from a launch site in Hainan Island and flew to a height of 67 miles.
A few months later in May 2018, OneSpace launched its first rocket - the OS-X0 or Chongqing Liangjiang Star. This nine-meter tall solid-propellant rocket launched from a base in northwestern China and flew up 62 miles.
This success in getting a rocket off the ground was a big milestone and brought a great deal of publicity to China's private space market. And there are a few companies that are seeking to service the suborbital niche. OneSpace/Zero One recently launched a suborbital rocket in February 2021.
But the true step forward would be to actually reach orbit and place a satellite there. This major stepping stone would prove a launch company's prowess and allow it to secure funding from investors for the next round. SpaceX had achieved this milestone ten years earlier in September 2008 with the fourth launch of its Falcon 1 expendable rocket.
As of this writing in March 2021, just one of China's private launch startups has been able to launch a rocket that reached orbit.
In October 2018, LandSpace/Blue Arrow tried to launch its Zhuque-1 (also called the Suzaku-1) into orbit. This 19 meter tall rocket was a three-stage rocket using solid propellant.
Had this rocket achieved orbit, it would have been an amazing achievement. The first private rocket to do so just four years after the industry's literal founding. But after a successful first and second stage separation, the third stage experienced certain issues and the launch failed.
Undeterred, LandSpace/Blue Arrow is working on a new iteration of the rocket, the 49 meter tall Zhuque-2, planned for launch some time in 2021. The rocket is powered by four "Tianque" 80-ton liquid oxygen-methane engines, first demonstrated in 2019. This choice of fuel is in line with the work done by SpaceX, who is using the same approach for their SpaceX Starship, and is reputed to be cheaper and cleaner-burning.
OneSpace/Zero One was the second company to try for an orbital launch with their 19-meter tall rocket. The OS-M is a four-stage solid fuel rocket capable of launching a 205kg payload into low Earth orbit.
On March 27th 2019, the rocket lifted off at Jiuquan Satellite Launch Center, Inner Mongolia, but a minute into the flight began veering off course. The rocket and its payload was lost, a small, 10kg Chinese nano-satellite (the Chinese nickname for such type of satellites is “cubic star") by a startup called Beijing ZeroG Labs.
Subsequently, OneSpace issued a statement with regards to its "rapid unscheduled disassembly". 45.68 seconds into the rocket's launch, the onboard gyroscope failed. The rocket's first stage succeeded in separating, but it quickly lost its way and crashed.
i-Space would be the first company to successfully achieve orbital flight with their rocket. On July 25, 2019 the 20-meter tall solid-fuel Hyperbola-1 launched from Inner Mongolia and achieved orbit. The rocket entered orbit and delivered several payloads including two government satellites and a bottle of fine wine.
In being the first to launch into suborbital flight, to launch into orbital flight, and to deliver satellites into space, i-Space takes the lead in China's private flight industry. Next for them would be the Hyperbola-2, a 28-meter tall, two-stage rocket capable of lifting up to 1.9 tons.
The Hyperbola-2 rocket will follow SpaceX and Blue Arrow and also use a mix of liquid oxygen and methane. And like with SpaceX's latest rockets, the first stage of the Hyperbola-2 will be recoverable.
Is It Sustainable?
Even within China, people are wondering about the economic sustainability of this skyrocketing market. It reflects some of the concerns analysts have had about the American private space industry. A hundred space startups means that not all of them are going to survive.
i-Space, LandSpace, OneSpace, and LinkSpace are space startups that focus on satellite launches. So like SpaceX, they invest a lot of capital and technological expertise into developing medium and large scale rockets that can put satellites (and eventually people) into low Earth orbit.
For those companies, the goal is to tap the Chinese domestic satellite launch market - which is closed to competitors like SpaceX and Blue Origin due to national security laws. With competition in small-sized launches intense, industry-leading companies are seeking to climb the value chain to compete in the more technically complicated space of medium-sized carriers - 1.5 to 4 tons.
Furthermore, there is the big question of "Who is going to pay for these flights?" If you look at the investments being made into the industry, the category receiving the most venture money are trying to figure out "satellite applications" rather than "satellite launches". In other words, trying to find a business model for the Chinese private space industry.
SpaceX is positioning their Starlink internet service as a way to commercialize the launch business and move it away from being so dependent on the government. Such a pathway is not feasible for the Chinese, so many of them are focusing on launching satellites that can report geospatial data and do remote sensing.
Private and Public
The ties between China's private space industry and its national space program - of which the Chinese nation is extremely proud - are interesting to explore. Unlike with the United States, China's national aerospace program is capitalist.
NASA, for better or worse, is a public organization with a Congressional budget. China in 1998 converted its space department into state-owned entities directly owned by the national government: China Aerospace Space and Industry Corporation (CASIC) and China Aerospace Science and Technology (CASC). The venerable, aforementioned China Great Wall Corporation is a subsidiary of the latter.
These two state-owned companies have access to advantages befitting a core asset of the state, but they still have to balance their books and make money. These startups are directly competing against the country's Kuaizhou and Jielong lines of small solid-fuel carrier rockets.
For these private companies to go from company founding to successfully launching rockets into orbit in less than five years implies some sort of "technology transfer" from the government. It has been pointed out that these rocket designs bear at least a passing resemblance to decommissioned missiles.
The question I am mulling over is whether or not this transfer happened as a matter of government policy. Is the government trying to "win" the private space industry? Or are experienced Chinese rocket scientists tired of working at their big boring SOE and bringing special know-how over to their hot new rocket startup? My thinking leans more to the latter.
I think even the Chinese agree that when it comes to the private space industry, SpaceX is the market leader. SpaceX launched the first satellites into orbit, are launching a commercial model for space flight with Starlink, and are working on Starship to send humans into deep space.
Right now, the private industry is running a race to close the gap with the Chinese national program. Each failed flight raises a chorus of voices criticizing these private rocket startups for wasting money and stealing resources from the national industry. So these companies are under immense pressure.
But the Chinese private space industry is moving fast. Whether or not they are being helped (or hindered) by the government behind the scenes, they are rapidly covering ground. Those one hundred space startups will consolidate and the top performers will soon begin making waves in the wider global industry.
Enjoyed this post? Share the newsletter or reply and say hello.