China taps rocket, satellite startups to catch up to SpaceX

TOKYO -- China is enlisting private-sector startups to build out its space industry in areas like rockets and satellites.

The world's second-largest economy has made space-related business a priority for growth but has yet to produce its answer to Elon Musk's SpaceX, which has a wide lead in launch services and satellite internet.

State-owned China Satellite Communications Group leads a push to launch over 50,000 satellites into low Earth orbit to create a satellite internet constellation that can rival SpaceX's Starlink.

The Chinese effort will incorporate technology from startups and other private companies to develop reusable rockets for low-cost, high-frequency launches.

To lower the barriers to the necessary research and development, China will let the private companies access national facilities including a rocket engine test site and facilities that replicate the environment of space. Such access typically has been limited to the military and state-owned companies.

SpaceX and Blue Origin, another U.S. space business, are the only companies with viable reusable rockets. In December, Chinese startup LandSpace Technology delivered a payload into orbit with its Zhuque-3 rocket, but failed to retrieve the first-stage booster. CAS Space, another Chinese startup, plans to attempt a launch and recovery of its Kinetica-2 rocket this month.

China's leadership sees the space industry as a driver of economic growth. The country's new Five-Year Plan, finalized this month, adds the ambition of becoming a space power to the government's goals of strengthening domestic manufacturing.

Over 600 space-related companies operated in China as of the end of last year, government data shows. A 20 billion yuan ($2.9 billion) government fund is planned to raise that number even higher. China also intends to create a national space law by 2027 to support private-sector participation.

China's space industry market is projected to reach 9.1 trillion yuan by 2030, four times last year's size, the China Commercial Industry Research Institute estimates. In addition to development and production of rockets and satellites, the scope of related services -- including satellite communications and data use -- is expected to grow.

Several local governments, such as the city of Beijing as well as Hunan and Hainan provinces, have announced plans to attract space industry players.

China sees a national security need for incorporating private-sector expertise into its space program and developing its own satellite networks. This awareness partly reflects how Russia's invasion of Ukraine has highlighted the importance of satellite technologies such as Starlink.

The government will lead China's exploration of the moon, Mars and asteroids while bringing the private sector into low Earth orbit projects, which have a greater likelihood of being profitable.

The country aims to collect samples from Mars in 2028 and become the second nation to achieve a crewed lunar landing in 2030.