As the direction of the US space policy changed from 2003 on, the National Aeronautics and Space Administration (NASA) gradually left the low Earth orbit (LEO) satellite sector to private industry, instead focusing on the deeper space domain with higher academic research value. This shift ushered in a new era of commercialization in the space industry. SpaceX, which currently dominates the field of LEO satellites, was founded during this period and emerged prominently only after advancements in rocket technology and a reduction in satellite manufacturing costs.
With the onset of the commercial space age worldwide, the value chain, ranging from upstream R&D and rocket launches to downstream operations and applications, collectively created a market worth approximately US$280 billion. Especially amid geopolitical tensions, the commercial space sector has become the main battleground for various stakeholders. In recent years, China has also rapidly caught up in the field of commercial space industry driven by national policies and funding.
Looking at China's investment in the space industry, the peak period occurred roughly between 2019 and 2021. Subsequently, some companies faced issues such as launch failures and entering a downturn. However, with the global space enthusiasm driven by benchmark players such as SpaceX and OneWeb and China's increased focus on the space industry, the country has begun supporting and guiding investments into the space industry through policy support and guided funding.
According to data from the Chinese enterprise business information platform "QCC," in 2023, China completed 170 financing cases in the commercial space sector, with a total financing amount reaching CNY18.5 billion. Equity financing was predominant, followed by seed rounds and angel rounds.
In terms of IPOs, a notable player in the Chinese commercial space industry, Chang Guang Satellite, which integrates satellite research and development, operation management, and remote sensing information services, had its IPO application accepted by the Shanghai Stock Exchange's Sci-Tech Innovation Board at the end of 2023. However, despite Chang Guang Satellite owning China's largest remote sensing satellite system, it still faces ongoing losses due to the market size not being large enough.
This highlights the challenges faced by the commercial space industry, including the huge capital requirements and long investment return cycles. Commercial space enterprises must rely on external financing and overcome challenges such as financing difficulties and market uncertainty.
The Chinese commercial space industry chain has covered various segments, from upstream R&D and manufacturing to downstream operations and applications. Upstream includes satellite manufacturing, rocket manufacturing, etc., while downstream includes communication, navigation, and remote sensing applications. Some enterprises have already risen to prominence, such as the private aerospace company Geespace.
Industry experts believe that although China still has a considerable gap with the United States in the commercial space sector, with policy momentum and support for local supply chains, it might be possible to develop the industry on a large scale, similar to the electric vehicle industry. The key lies in whether the commercial space sector can seize opportunities closer to consumers and expand the market.
Moreover, diffusing the achievements of state-owned enterprises in the aerospace sector to private companies could help reduce capital expenditure and costs in the early stages of research and development, thereby mitigating risks to a certain extent.
Twenty years ago, when NASA decided to leave the LEO and commercial space stage to private enterprises, the sector achieved breakthrough technologies after long-term investment in time and cost. Commercial space will continue to be a battleground for major power struggles, and the opportunities derived from it will attract more players to enter the market.
