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The Chinese space industry is experiencing commercialization, with approximately 100 start-up companies being formed since the government lowered the regulations in 2014. Based on statistics, more than 13 billion RMB has been invested into the commercial space industry in China. However due to the Covid-19 situation, many companies which were planning to launch their first satellite in 2020 were unable to do so due to the shutdown. Furthermore, given the pandemic, the commercial space industry slowed down, with 2020’s total funding accounting for only 15% of 2019’s funding. In 2020, there were 6 rounds of funding reported, the highest being Landscape’s C-round for RMB 500 million from Country Garden Venture.
(Image from interactive.satellitetoday.com)
The Chinese space industry is dominated by 2 state-owned companies, the China Aerospace Science & Industry Corporation Limited (CASIC) and the China Aerospace Science and Technology Corporation (CASC), as well as a private company, the China Great Wall Industry Corporation Limited. As large infrastructure is required for research and development in the space industry, these companies often setup their business at different parts of China. A popular HQ location is Beijing since this city is in closest proximity to the central government, improving accessibility for cooperation with the officials.
(Image from www.ida.org)
Zooming in on the commercial space industry specifically, the big players are Galactic Energy, iSpace and LinkSpace. Galactic Energy, a private space launch firm, has succeeded with its first orbital launch and is the 4th Chinese company to do so. Galactic Energy mainly provides commercial services for space cargo delivery with high reliability and low costs. The company has already gained the support of rocket research and testing from Jianyang, a Chinese city.
For foreign companies interested in entering the Chinese space industry, the Chinese space industry present the following strengths.
Political and financial support from the government, meaning that commercial space companies can draw on state-owned space supply chains and manufacturing capabilities. However, the lack of comprehensive space regulation laws could be a challenge.
Large, hardworking, and well-trained workforce. However, as with other high-tech sectors, labour market pressure have driven up salaries and created intense competitor for well-trained staff.
Large number of private equity firms and VC funds seeking investment opportunities apart from the IT and telecommunications sectors, albeit shorter timeline for Return on Investment (ROI).
To conclude, the commercial space industry is a growing industry, given the support from the Chinese government and large investments. However, foreign companies seeking to enter the Chinese market should take note of the fierce competition and space laws.
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