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Who Wins in the US-China Commercial Space Race?


The new space race has begun, this time with American and Chinese commercial space companies competing to become the global aerospace industry leader. While these aerospace companies may be looking at the stars, they do not necessarily have their heads in the clouds, as new innovations are benefitting day-to-day life on Earth and increasing public enthusiasm for aerospace technology. While this is a strategic competition for both sides, the rise of privately-owned space companies will ultimately benefit everyone.

The 20th century space race was a major turning point for technology and innovation. Although it was spurred on by political tensions between the United States and the former Soviet Union, the space race resulted in feats that were once thought impossible. Citizens in both nations were infatuated with each new aerospace innovation introduced, from Sputnik’s launch to Apollo 11’s lunar landing. The era ultimately produced technological advancement, mass public interest in science, and optimism for the future.

The current rise in both American and Chinese commercial space companies has caused many to believe that another space race has begun. It’s easy to see the historical parallels: a period of political tension between two global superpowers, a surge of innovation in the field of aerospace technology, and individuals who interpret scientific achievements as vindication of their nation’s superpower status. However, much like the original space race, there is a more positive interpretation of these advancements in the aerospace sector. Rather than viewing the new space race as another geopolitical battlefield, one can view it as a renaissance of aerospace innovation with benefits for both nations.

The Rise of Commercial Space Companies in the US

The commercial space industry in America began during the 1980s, following a series of policy changes. On October 30, 1984, congress passed the Commercial Space Launch Act, which provided privately-owned companies with access to government resources that were previously exclusive to the National Aeronautics and Space Administration (NASA). The accessibility to these ancillaries should have technically given rise to various commercial space companies, but that was far from the case. Even with access to special facilities, the cost of operating a private aerospace company was outrageously expensive. Furthermore, no one wanted to compete with NASA and its space shuttle program. During that period, the space shuttle was the most convenient method of transporting cargo to space stations and satellites to orbit. As a result, high operation costs and competition with NASA made many Americans reluctant to create private space companies.

Starting from about a decade ago, the aerospace industry began to shift in favor of commercial space companies. NASA’s space shuttle program, which had once intimidated competitors, shut down in 2011. Following the closure of the program, many privately-owned space companies began stepping in to fill the void. These companies were owned by billionaire businessmen, such as Elon Musk and Sir Richard Branson, meaning that they had the financial capital to cover the vast expenses required for successfully entering the industry. The two aspects that previously prevented individuals from entering the commercial space industry had been removed and more Americans felt comfortable developing and investing in privately-owned space companies.

It was not long until American commercial space companies began captivating the media with achievement after achievement. In 2012, Space X’s Dragon became the first privately-owned spacecraft to reach the International Space Station. Nine years later, Virgin Galactic’s rocket plane flew a group of employees 50 miles in the air — high enough for them to experience the effects of microgravity. Blue Origin has spent the past decade developing various reusable rockets and suborbital vehicles. The world is now watching these companies in anticipation of their next groundbreaking accomplishments.

What Are China’s Plans for Space?

Similar to their American counterparts, Chinese commercial space companies are relatively new to the field of aerospace. For decades, aerospace innovation in China was dominated by state-owned enterprises (SOEs), such as the Chinese Aerospace Science and Technology Corporation (CASC). Privately-owned space companies lacked the funding necessary to compete with their state-sponsored rivals. Fortunately, the release of Document 60 (Guiding Opinions of the State Council on Innovating the Investment and Financing Mechanisms in Key Areas and Encouraging Social Investment) in 2014 evened the playing field for commercial space companies. The document led to a series of policy changes that provided privately-owned space companies with access to government launch sites and other ancillaries for their research and development. As a result, more Chinese entrepreneurs felt confident in their ability to develop globally competitive space companies.     

For decades, the CASC has made the most significant contributions to the nation’s aerospace innovation. The organization’s past successes range from the domination of broadcast satellite operations to the development of lunar orbiters (one of which helped China become the second nation to plant a flag on the moon). CASC has even launched high-resolution satellites that monitor shifts in weather patterns. Chinese scientists can utilize this data to better anticipate natural disasters and provide residents with more rapid responses. CASC has spent years as the industry leader in Chinese aerospace; however, the increase in commercial space companies could bring about the next wave in aerospace innovation.

The revised policies also reflect the Chinese government’s interest in the commercial space industry. Beijing is well aware of both the popularity of American commercial space companies and their dominance in the global aerospace industry. In order to prevent the nation from falling too far behind its strategic competitor, the Chinese government is committed to helping its privately-owned space companies succeed – a pursuit that the government views as paramount to collaboration with international clients. Many companies that are interested in the deployment of satellites — but lack an advanced space program in their own nation — outsource the job to aerospace companies abroad. Beijing worries that some clients might be reluctant to collaborate with an organization that has direct connections to the governing Chinese Communist Party; therefore, cultivating private commercial aerospace companies would serve as an alternative path to getting more international clients to purchase Chinese services.

The most notable Chinese commercial space companies have the potential to influence the international aerospace field. While many of these companies were founded less than six years ago, they have shown tremendous progress in such a short amount of time. For example, i-Space is currently developing reusable first-stage boosters to provide space crafts with the ability to land vertically (taking inspiration from SpaceX). Galactic Energy is developing rockets that are capable of deploying entire constellations, rather than being limited to a single load of satellites. Spacety has recently developed a satellite that can reconstruct 3D landscapes of the images picked up on its radar. Many of these companies are still playing catch up with commercial space companies in America; however, they appear to be well on track to closing the gap in the coming decade.

The Benefits of the New Space Race

Increased Public Interest in Aerospace

More Americans have been keeping up with commercial space companies, including individuals who are normally uninterested in space travel. The rising popularity of companies such as SpaceX and Virgin Galactic could influence more young Americans to pursue a career in STEM. Approximately 53% of the US labor market consists of jobs involving STEM-related skills, and only 43% of workers have the required training to fulfill those roles. Unless more young people receive the training necessary for STEM-related jobs, this field of the US labor market risks stagnation. The American government is well aware of this growing issue and is intent on finding a way to make science- and technology-intensive jobs more appealing to young Americans.

Privately-owned space companies could potentially inspire more young Americans to pursue a career in aerospace or other STEM-focused fields. These companies are run by charismatic entrepreneurs who have sold their mission to not only investors, but also employees. Former SpaceX employees have spoken positively of their experiences at the company: the opportunity to both work alongside intellectuals and develop technologies capable of revolutionizing space travel made their work all the more rewarding. That level of inspiration could persuade more Americans to consider aerospace as a future career path.   

The increase in commercial space companies has also influenced Chinese citizens, as public enthusiasm for space has grown tremendously in recent years. This zeal for space travel even surpasses what one might find in America, as a 2019 survey asking children between the ages of 8 and 12 what they wanted to be when they grew up revealed that 56% of Chinese children wanted to be astronauts (in contrast, a majority of children in the US wanted to be YouTubers and influencers). From rocket launches receiving millions of views on Weibo to the Shenzhou-12 crew video calling students from the Tianhe Space Station, Chinese youth cannot seem to get enough of aerospace-related content.

The excitement regarding new opportunities for space travel has also motivated Chinese startups. SpaceX Founder Elon Musk is admired and idolized in China. His contributions to the advancement of technology have inspired countless Chinese researchers and entrepreneurs to develop their own aerospace technologies. Some Chinese companies have even utilized SpaceX’s designs as a foundation for their own space crafts. Although they may become industry rivals in the future, many Chinese commercial space companies admire the accomplishments of their American counterparts and are motivated to replicate their successes.

Aerospace Also Solves Problems on Earth

Prince William criticized the current space race in a recent interview, arguing that elite scientists should be devoting more time to addressing issues on this planet, rather than trying to explore other ones. In defense of these scientists, aerospace technologies can also be utilized to improve life on Earth. NASA satellite data is used to monitor the effects of climate change more closely, so that solutions can be properly implemented to reduce greenhouse gases. The China National Space Administration’s BeiDou navigation satellite system is being utilized by cities as a GPS alternative to moderate traffic, reduce crime, and improve response times for emergency rescue teams. Aerospace organizations may be looking to the stars, but that does not mean that they have their heads in the clouds.

Commercial space companies are also creating technology that directly benefits people on Earth. In the US, SpaceX has been collaborating with Starlink to transport batches of satellites to space that will increase broadband for users. Starlink’s target consumers are located in rural areas of the world that often receive minimal Internet connectivity. The satellites will provide these communities with 20 mbps uploads and 100 mbps downloads, vastly improving their online experiences. In China, Galactic Energy is developing a similar strategy for transporting large quantities of satellites at once (although the process is still in development). Another Chinese company, LinkSpace, is currently developing rockets for high-speed delivery across the Earth. Meanwhile, Spacety is strategizing a way to both manufacture and launch satellites for customers in a six-month timeframe. Privately-owned space companies are not exclusively devoted to space travel, they are also creating technology that benefits day-to-day life.

Looking Forward: How Much Is China Investing in Space?

Commercial space companies in the US and China are leading the way to a new era of aerospace innovation. While it might not be on par with the US yet, China’s commercial space industry has tremendous potential. There are currently over 160 commercial space companies in China, compared to over 5,000 in the US, and approximately US$1.3 billion has been invested into Chinese commercial space companies as of 2020. Furthermore, the Chinese government’s space budget is around US$6 billion, making it the second largest in the world. This massive financial commitment is proof that many sponsors are confident in the future of China’s commercial space industry.     

The future for commercial space industries in both nations appears promising. From the creation of new satellite deployment systems, to the possibility of a person landing on Mars, the new era of space technology seems to have limitless potential. Rather than examining the new space race as yet another sphere of geopolitical rivalry, spectators should also consider the ways that both nations benefit from this increase in space innovation and exploration.

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