Space: China's Final Frontier

It's building a commercial industry focused on sending small payloads into orbit.

- Bruce Einhorn & Dong Lyu

Billionaires Elon Musk, Jeff Bezos, and Richard Branson dominate the emerging industry of commercial spaceflight. They’re competing to put satellites, tourists, or both in space in their bids to become cheaper alternatives to NASA, the European Space Agency, and other government-run space programs. But like pioneers in the smartphone and artificial intelligence industries before them, they now face competition from a deep-pocketed upstart that threatens to disrupt their launchpads: China. President Xi Jinping has loosened the government’s monopoly on space launches, and that’s fueling the formation of small domestic companies with ambitions to challenge Musk’s SpaceX, Bezos’ Blue Origin, and Branson’s Virgin Galactic.

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 U.S., 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 Land space Technology Corp. “There’s no better time for a commercial rocket firm to grow in China than now.”

The number of satellites in space increased 50 percent 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.