Is China a peer competitor in the space race? On some fronts, the answer is yes. In others, the concern is that China is moving up the value chain so quickly that its companies may soon out-price American firms across the developing world.
“Our space industry is SpaceX and Starlink. SpaceX is far ahead of China. But if you look at the number three on down, it’s all China,” said Blaine Curcio, founder of Orbital Gateway Consulting. Curcio was one of five panelists invited to speak at the U.S. China Economic and Security Review Commission hearing on April 3 about China’s space ambitions. “There is a much broader and deeper bench in China than you realize,” Curcio told the Commission last week. [Testimony]
National security rules, namely the International Traffic in Arms Regulations—a set of U.S. government regulations that control the export and import of defense-related goods and services – have forced space manufacturing to stay domestic. It is a non-tariff barrier that acts as a tariff, only more impenetrable. In the 1990s and 2000s, U.S. satellite companies were fined for sharing technical data with China that was later used to improve Chinese missile technology. This led to satellites being added to the ITAR list in 1999.
However, in 2014 some commercial satellites shifted to less restrictive regulations under a slightly different export regime and now it is more common to see foreign players operating here, only they have to manufacture here, too. Indian satellite propulsion maker Bellatrix Aerospace announced plans on April 10 to open a manufacturing facility in the United States, and last summer D-Orbit, the European space transportation company, established a joint venture here to enter the commercial satellite manufacturing business.
Worth noting, these protective measures didn’t render SpaceX a basket case that is so comfortable in its position that it stopped innovating. Instead, SpaceX engineers created new types of rockets and Starlink is the world’s leading retail, internet satellite service provider. The Starlink hardware, the small satellite receiver that fits in a backpack or gets screwed into your rooftop, is made in the U.S. It’s sold at Home Depot; one of the few American made goods sold inside that import dependent store.
When it comes to building out the space industry — everything from the machines used to build rocket launchers to low Earth orbit satellites — China takes a different approach. Much like with semiconductors, it doesn’t only support large incumbents. It also pours state-backed investment into disruptive start-ups, often via state-owned enterprises (SOEs).
“China has SOEs which the government supports and they encouraged a lot of private sector players to do well at home and abroad,” said Dave Cavossa, President, Commercial Space Federation [Testimony]
Oman launched a satellite in November and it was a Chinese commercial company that was involved in building it, and launching it from the Gobi Desert in Inner Mongolia.
Oman launched a satellite in November 2024 with the help of a Chinese company. The satellite, OL-1, was built by the China Academy of Space Technology (CAST), a subsidiary of the China Aerospace Science and Technology Corporation, and Oman Lens. It was launched by CAS Space from the Jiuquan Satellite Launch Center, located in the Gobi Desert in Inner Mongolia.
Much of the demand for remote sensing satellites in developing countries is now going to Chinese firms, witnesses told the Commission.
Commissioner and Princeton professor Aaron Friedberg raised the topic of satellite internet. Strangely, no one mentioned SpaceSail, a Shanghai-based low Earth orbit (LEO) satellite company that is quickly emerging as a major Starlink rival. Elon Musk’s Starlink leads the market with over 7,100 satellites in orbit. Amazon is racing to join the market with Project Kuiper, which plans to launch 3,236 satellites, with early models already in space and services expected to begin later this year.
Meanwhile, SpaceSail plans to launch 648 satellites this year and has announced a goal of at least 15,000 by 2030.
Brazil telecom company Telebras already has a deal with them.
It is unclear how much SpaceSail service will cost, but if the company follows the typical China playbook, it will likely undercut American rivals on price. That would make it especially attractive in regions where China is not viewed as an economic or political threat.
The U.S. struggled to convince even its closest allies to ban Huawei from their 5G infrastructure, citing espionage risks. Satellite internet could prove even more difficult to regulate, since the connection is between the Chinese provider and individual consumers. If American consumers are reluctant to give up TikTok, they may not think twice about using SpaceSail’s satellite broadband.
Andrew Cox, Founder of Fourspoke LLC [Testimony], told the Commission that the market for satellite internet was “in the billions.”
“The ability to provide 200-plus megabytes per second to anywhere on Earth is a huge leap forward,” Cox said. “Doing that with thousands of LEO satellites is where the competition begins.”
Are U.S. investors bankrolling any of this? It wouldn’t be the first time. ByteDance’s TikTok, as well as fast fashion giants Shein and Temu, received backing from major California venture capital firms. As have numerous Chinese defense contractors, until the Trump and Biden administrations forced the likes of BlackRock and Vanguard to dump their shares of those companies by June 2022.
Commissioner Michael Kuiken asked whether any U.S. money was flowing into China’s space sector. “The best I can say is no,” said Curcio. “Sequoia Capital’s China arm did in 2017, but I haven’t seen investment in the last five years.” Sequoia’s China was spun off and is no longer part of the same Silicon Valley entity.
“I haven’t seen cases where the U.S. is investing in China space,” added Cavossa. “But I have seen that when we invest in a space here, they copy us and invest in the same thing there.”
In the big picture, the U.S. still leads. Most of the world’s top 10 commercial and defense satellite manufacturers are American, led by Boeing and Lockheed Martin. In terms of spaceports, China has three of the busiest facilities in the world, led by Jiuquan in Inner Mongolia. The U.S. has two, with Cape Canaveral in Florida at number one.
Who’s ahead in the space race? The Commission was curious.
“There is no finish line at the moment,” said General Chance Saltzman, Chief of Space Operations at the U.S. Space Force [Testimony].
One market estimate mentioned in Ian Fletcher and Marc Fasteau’s new book titled Industrial Policy counted $362 billion in revenue for the commercial space industry globally in 2022, compared to $102 billion for government expenditures, including NASA’s budget of $24 billion.The biggest end markets are satellite communications ($144 billion) and satellite navigation ($228 billion).
Annual global private investment flowing into the space sector now roughly equals NASA’s budget and from 2013 through 2023, venture capital firms invested $272 billion in 1,746 space startups. An analysis by Merrill Lynch estimates the value of the space launch market at $2.7 trillion by 2045, including high speed launches that will revolutionize logistics and delivery of exported goods.
China is the main concern. The Indians don’t have a history of stealing or copying U.S. inventions. For Washington, this is one sector they will have to figure out on their own. They already are.
Domestic manufacturers of satellites and rockets are protected from China competition by national security laws. The industry is basically forbidden to work with them or offshore production, unlike other defense contracts that source thousands of parts from mainland China. ITAR has kept the sector’s supply chain free of Chinese parts, something we are often told by executives of multinationals, like Raytheon, is impossible to do.
The Committee on Foreign Investment in the United States has also kept China from buying companies in the sector and reverse engineering to duplicate, mass produce, and eventually wipe out companies like Boeing.
As Fletcher and Fasteau write in their book: “Despite clichéd arguments that high technology requires global sourcing, the U.S. space industry outcompetes foreign rivals.”
It also shows that we can innovate and manufacture here and when we do, we lead. Lastly, a job as a manufacturing technician at Lockheed Martin Space, a large manufacturer of satellites, pays a median salary of $57,000 and does not require a college degree.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
Is China Gaining Ground in the New Space Race?
Is China a peer competitor in the space race? On some fronts, the answer is yes. In others, the concern is that China is moving up the value chain so quickly that its companies may soon out-price American firms across the developing world.
“Our space industry is SpaceX and Starlink. SpaceX is far ahead of China. But if you look at the number three on down, it’s all China,” said Blaine Curcio, founder of Orbital Gateway Consulting. Curcio was one of five panelists invited to speak at the U.S. China Economic and Security Review Commission hearing on April 3 about China’s space ambitions. “There is a much broader and deeper bench in China than you realize,” Curcio told the Commission last week. [Testimony]
National security rules, namely the International Traffic in Arms Regulations—a set of U.S. government regulations that control the export and import of defense-related goods and services – have forced space manufacturing to stay domestic. It is a non-tariff barrier that acts as a tariff, only more impenetrable. In the 1990s and 2000s, U.S. satellite companies were fined for sharing technical data with China that was later used to improve Chinese missile technology. This led to satellites being added to the ITAR list in 1999.
However, in 2014 some commercial satellites shifted to less restrictive regulations under a slightly different export regime and now it is more common to see foreign players operating here, only they have to manufacture here, too. Indian satellite propulsion maker Bellatrix Aerospace announced plans on April 10 to open a manufacturing facility in the United States, and last summer D-Orbit, the European space transportation company, established a joint venture here to enter the commercial satellite manufacturing business.
Worth noting, these protective measures didn’t render SpaceX a basket case that is so comfortable in its position that it stopped innovating. Instead, SpaceX engineers created new types of rockets and Starlink is the world’s leading retail, internet satellite service provider. The Starlink hardware, the small satellite receiver that fits in a backpack or gets screwed into your rooftop, is made in the U.S. It’s sold at Home Depot; one of the few American made goods sold inside that import dependent store.
When it comes to building out the space industry — everything from the machines used to build rocket launchers to low Earth orbit satellites — China takes a different approach. Much like with semiconductors, it doesn’t only support large incumbents. It also pours state-backed investment into disruptive start-ups, often via state-owned enterprises (SOEs).
“China has SOEs which the government supports and they encouraged a lot of private sector players to do well at home and abroad,” said Dave Cavossa, President, Commercial Space Federation [Testimony]
Oman launched a satellite in November and it was a Chinese commercial company that was involved in building it, and launching it from the Gobi Desert in Inner Mongolia.
Oman launched a satellite in November 2024 with the help of a Chinese company. The satellite, OL-1, was built by the China Academy of Space Technology (CAST), a subsidiary of the China Aerospace Science and Technology Corporation, and Oman Lens. It was launched by CAS Space from the Jiuquan Satellite Launch Center, located in the Gobi Desert in Inner Mongolia.
Much of the demand for remote sensing satellites in developing countries is now going to Chinese firms, witnesses told the Commission.
Commissioner and Princeton professor Aaron Friedberg raised the topic of satellite internet. Strangely, no one mentioned SpaceSail, a Shanghai-based low Earth orbit (LEO) satellite company that is quickly emerging as a major Starlink rival. Elon Musk’s Starlink leads the market with over 7,100 satellites in orbit. Amazon is racing to join the market with Project Kuiper, which plans to launch 3,236 satellites, with early models already in space and services expected to begin later this year.
Meanwhile, SpaceSail plans to launch 648 satellites this year and has announced a goal of at least 15,000 by 2030.
Brazil telecom company Telebras already has a deal with them.
It is unclear how much SpaceSail service will cost, but if the company follows the typical China playbook, it will likely undercut American rivals on price. That would make it especially attractive in regions where China is not viewed as an economic or political threat.
The U.S. struggled to convince even its closest allies to ban Huawei from their 5G infrastructure, citing espionage risks. Satellite internet could prove even more difficult to regulate, since the connection is between the Chinese provider and individual consumers. If American consumers are reluctant to give up TikTok, they may not think twice about using SpaceSail’s satellite broadband.
Andrew Cox, Founder of Fourspoke LLC [Testimony], told the Commission that the market for satellite internet was “in the billions.”
“The ability to provide 200-plus megabytes per second to anywhere on Earth is a huge leap forward,” Cox said. “Doing that with thousands of LEO satellites is where the competition begins.”
Are U.S. investors bankrolling any of this? It wouldn’t be the first time. ByteDance’s TikTok, as well as fast fashion giants Shein and Temu, received backing from major California venture capital firms. As have numerous Chinese defense contractors, until the Trump and Biden administrations forced the likes of BlackRock and Vanguard to dump their shares of those companies by June 2022.
Commissioner Michael Kuiken asked whether any U.S. money was flowing into China’s space sector. “The best I can say is no,” said Curcio. “Sequoia Capital’s China arm did in 2017, but I haven’t seen investment in the last five years.” Sequoia’s China was spun off and is no longer part of the same Silicon Valley entity.
“I haven’t seen cases where the U.S. is investing in China space,” added Cavossa. “But I have seen that when we invest in a space here, they copy us and invest in the same thing there.”
In the big picture, the U.S. still leads. Most of the world’s top 10 commercial and defense satellite manufacturers are American, led by Boeing and Lockheed Martin. In terms of spaceports, China has three of the busiest facilities in the world, led by Jiuquan in Inner Mongolia. The U.S. has two, with Cape Canaveral in Florida at number one.
Who’s ahead in the space race? The Commission was curious.
“There is no finish line at the moment,” said General Chance Saltzman, Chief of Space Operations at the U.S. Space Force [Testimony].
One market estimate mentioned in Ian Fletcher and Marc Fasteau’s new book titled Industrial Policy counted $362 billion in revenue for the commercial space industry globally in 2022, compared to $102 billion for government expenditures, including NASA’s budget of $24 billion.The biggest end markets are satellite communications ($144 billion) and satellite navigation ($228 billion).
Annual global private investment flowing into the space sector now roughly equals NASA’s budget and from 2013 through 2023, venture capital firms invested $272 billion in 1,746 space startups. An analysis by Merrill Lynch estimates the value of the space launch market at $2.7 trillion by 2045, including high speed launches that will revolutionize logistics and delivery of exported goods.
China is the main concern. The Indians don’t have a history of stealing or copying U.S. inventions. For Washington, this is one sector they will have to figure out on their own. They already are.
Domestic manufacturers of satellites and rockets are protected from China competition by national security laws. The industry is basically forbidden to work with them or offshore production, unlike other defense contracts that source thousands of parts from mainland China. ITAR has kept the sector’s supply chain free of Chinese parts, something we are often told by executives of multinationals, like Raytheon, is impossible to do.
The Committee on Foreign Investment in the United States has also kept China from buying companies in the sector and reverse engineering to duplicate, mass produce, and eventually wipe out companies like Boeing.
As Fletcher and Fasteau write in their book: “Despite clichéd arguments that high technology requires global sourcing, the U.S. space industry outcompetes foreign rivals.”
It also shows that we can innovate and manufacture here and when we do, we lead. Lastly, a job as a manufacturing technician at Lockheed Martin Space, a large manufacturer of satellites, pays a median salary of $57,000 and does not require a college degree.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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