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IN DEPTH: Chinese Space Industry And its Business Relationship
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Chinese Space Industry
And its Business Relationship
By John Feng

BT 201907 IN DEPTH 05What once was pure sci-fi is now a reality. This is something that older generations can relate to and younger ones are expectant to witness. Since the second half of the 20th century, in what was called the “Space Race”, the interest in space ventures has escalated and now United States, Russia, China, India, European Union, and Japan are the main players in the outer world exploration.

In this article, more than talking about the industry as a whole or telling a story about the past accomplishments, I would like to focus on China’s strategy and what is expected to happen in the future. In addition to this, it is also crucial to connect such endeavours with its business relationship and analyse how it can impact the Chinese entrepreneurial landscape.


Governmental Strategy

BT 201907 IN DEPTH 04Artist impression of the future Chinese Space Station

China is the third country to “independently send humans into space”. The planning and development of the entire space program is made through the China National Space Administration (CNSA). Jointly with it there is the China Aerospace Science and Technology Corporation (CASC), which plays a more operational role and is responsible for the design, manufacture, and development of spacecraft, launch vehicles, strategic and tactical missile systems, and ground equipment.

BT 201907 IN DEPTH 03For now, the national space program has two main objectives: first to complete the works on Chang’e mission, which will culminate in the first sample-return mission to the moon. Second, the plan to establish a Chinese Space Station is in motion and is expected to begin in 2022. For the long-term, there is a clear goal of conducting crewed missions to the Moon and robotic ones to Mars.

Such ambition from the Chinese government might have inspired private investors, which are now interested in changing the conception of space as we know it.




Private Market

Although this industry’s success has been measured by the public sector, private companies have been developing to become a driver of innovation and recognition.

BT 201907 IN DEPTH 02In 2018, the private Chinese space start-ups gathered a staggering 3.57 billion yuan in equity investment and, among these companies, one stands out: LandSpace. With entirely private funding, the Beijing-based company is on the path for success. The successful testing of the Phoenix in 2018 (a liquid-oxygen/methane rocket engine) was the first time a Chinese company has achieved such a feat.

BT 201907 IN DEPTH 06A Linkspace rocket on March 27 reached 20 meters before hovering and making a powered landing.

LinkSpace, another firm in this industry, has, for the second time in two months, successfully launched and landed a 1.5 metric-ton rocket, which represented another small, yet vital, step to the development of reusable space technology. OneSpace and iSpace are other examples of start-ups that recently launched suborbital rockets in fruitful ways.

As it happens in the United States, the private sector is committed to rival, in a healthy way, with the governmental structures and have a word to say in innovation, so much that the technologies produced by these companies are getting international recognition and clients.

BT 201907 IN DEPTH 01An OS-M series rocket illustration from China's OneSpace webpages.




Business Opportunities

BT 201907 IN DEPTH 07Assembly of a Long March 6 launch vehicle

This industry goes way beyond the manufacture of elements that are directly related to space exploration. Indeed, the development of technologies that can be applied to other industries might be the biggest gain to society in general. As is CASC’s case, their research and production include information technology, new materials, regenerative energy, special vehicles and auto parts, space biology, among others.

In addition to this, the government might even play a more essential role when it decides to fund even more the research and development at the university or private company levels.

BT 201907 IN DEPTH 08Engineers test Satellite TY3-12, which weighs 10 kilograms, at a lab of Spacety in Changsha, Hunan province, April 22, 2019.

For start-ups, the biggest trend now, and the one that might be more realistic in the near term, is the development of nanosatellites at affordable prices that can be used for both research and commercial purposes. Weighing less than 10 kilograms and as small as a “shoebox”, these satellites are on the verge of becoming very popular in the next years. Not only universities can use them to conduct their research, but also commercial businesses will be able to offer high-speed internet or remote-sensing and tracking services.

Moreover, entrepreneurs from other industries, like Robin Li (co-founder of Baidu), have been advocating the potential of space ventures. Not only China can compete for a bigger cut in the international market, but also can try to impose its technology to newcomers.




Wrapping Up

BT 201907 IN DEPTH 09A full-size model of the core module of China's space station Tianhe exhibited at the 12th China International Aviation and Aerospace Exhibition (Airshow China) in Zhuhai, south China's Guangdong Province.

Even though China started the space program some years after the US or Russia, it has made an effort to keep up at the same level and the signs are clear. However, even if this industry can bring behemoth rewards, it also brings great risks for the small players. One unsuccessful launch can dictate the end of a company and the loss of years of work. This is where the follow up of investors and government can make the difference.

Despite this fact, Chinese entrepreneurs do not seem scared and the business environment is expected to keep growing, as more projects achieve their milestones. For them, the sky is not the limit anymore.



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