The startups are receiving funding from China-based venture capitalists and private equity investors trying to tap into an $8 billion national space budget—second only to the US, according to the Space Foundation in Colorado Springs. They can also rely on the expertise of rocket scientists from China’s vigorous manned space program. “We are really a startup growing on the shoulders of the state aerospace giant,” says Zhang Changwu, chief executive officer of Beijing-based Landspace Technology. “There’s no better time for a commercial rocket firm to grow in China than now.”
The number of satellites in space increased 50 per cent from 2013 to 2017, to 1,738, according to the Satellite Industry Association. Chinese launchers could help manufacturers seeking an inexpensive way to get even more of them into orbit.
One lucrative payload for the Chinese could be miniature satellites, which can weigh less than 200 pounds. Launching these satellites will generate $15 billion in revenue by 2027, up from less than $100 million last year, according to the Paris consulting firm Euroconsult. That’s also a niche where big players such as Space Exploration Technologies (SpaceX), whose Falcon Heavy rocket can lift into orbit payloads of almost 64 metric tons (141,000 pounds), have been less active.
Several mainland companies have succeeded with suborbital launches and are vying to be the first in China to place satellites into orbit around the Earth. Founded in 2015, Landspace had raised 500 million yuan ($72 million) from local investors by April 2018 and employs 170 rocketeers and other engineers, almost all veterans of the national space program, Zhang says. The company plans to launch a rocket this month carrying a satellite for state-run broadcaster CCTV. Two other Chinese companies have orbital launches scheduled by 2020. Xi opened the space market to private-sector investment in 2014 to help China’s technology sector shift focus from commodity smartphones and televisions to sophisticated semiconductors, artificial intelligence, and reusable rockets. More than 60 Chinese companies have entered the commercial space industry in the past three years, the state-run Xinhua News Agency reported in May. Musk’s popularity—China is the second-largest market for his Tesla Inc. electric vehicles—has also inspired many startups. “SpaceX has had a huge impact,” says Lan Tianyi, founder of Ultimate Blue Nebula, a Beijing-based space consultant.