China's commercial space industry embraces surge in demand despite capacity challenges

China's commercial space industry has accelerated into the fast lane fueled by soaring demand for satellite services in spite of huge launch capacity challenges.

The past few years have witnessed rapid growth of China's commercial space industry. The scale of the market jumped from 800 billion yuan (about 110 billion U.S. dollars) in 2019 to 1.9 trillion yuan in 2023, with a compound annual growth rate of 23.3 percent. The market scale is expected to reach 2.34 trillion yuan by the end of 2024, according to an industry report.

The number of registered and effectively operating commercial space enterprises in China had exceeded 400 by the end of 2022, official data showed.

Buoyed by growing demand for satellite communication, satellite navigation and satellite remote sensing applications, China has conducted an increasing number of rocket launches in recent years. In 2023, China carried out 26 commercial launches, up 23.8 percent year on year.

This rapid growth, however, is underscored by a tangible strain on resources.

Inside the control center at Beijing-based Emposat Co., Ltd., a satellite ground segment service provider, screens are displaying a comprehensive compilation of orbital information for satellites in space, sourced from open channels. Notably, the most prevalent satellites in low-Earth orbit (LEO) are the Starlink satellites from the United States, underscoring the scarcity of space resources.

"The space resources are very limited, and the competition for low-Earth orbit will only intensify. If we don't launch our satellites as quickly as possible, others will lunch theirs, and our access to these resources will continue to diminish," said Cao Meng, vice president of Emposat.

Cao highlighted that both orbital slots and radio frequencies are finite and non-renewable resources, intensifying global competition for low Earth orbit satellites. Countries like Britain, the United States, Canada, and Russia have ambitious plans for Large Low Earth Orbit Satellites Constellations (LLEOSC), while China's own "Qianfan Constellation" and China Satellite Network Group are also accelerating their deployment plans.

The "Qianfan Constellation", also known as the "G60 Constellation", aims to establish a network of over 10,000 LEO multimedia satellites by 2030 for enhanced coverage and more accessible services.

Currently comprising 54 satellites with three launches, the plan anticipates 15,000 satellites by 2030. To achieve this with the current launch pattern, more than 150 launches annually are needed, posing a significant challenge given China's peak annual launches have been under 70.

"Right now, the deployment demand for satellite constellations, especially in the field of satellite internet, has placed very high requirements on our overall launch vehicle capabilities. However, the current traditional launch vehicles are not only expensive, but also unable to meet the required launch cycle and delivery timelines," said Cao.

China's commercial space industry embraces surge in demand despite capacity challenges

China will roll out a series of targeted measures to stabilize investment and unlock greater space for private capital, an official said on Thursday.

Chen Changsheng, deputy director of the State Council Research Office who participated in the drafting of this year's Government Work Report, made the statement at a press briefing held in Beijing.

He noted that China will leverage the guiding role of government funding and the driving effect of major projects to shore up investment.

Total government investment this year is set to exceed five trillion yuan (about 725 billion U.S. dollars), which will come from central budget investment and local government special bonds for major national strategies and security capacity building projects and equipment upgrades. Meanwhile, 109 major projects have been planned in the draft outline of the 15th Five-Year Plan (2026-2030).

China will also stimulate investment by opening up more application scenarios for businesses.

On the traditional front, a long-term mechanism will be improved to encourage private enterprises to participate in major national projects. For emerging sectors, China will further open scenarios in biomedicine, aerospace, and the low-altitude economy.

"Low-altitude economy has developed rapidly in recent years, with sound applications seen in fields such as agriculture, forestry plant protection, as well as surveying and inspection. Going forward, we will accelerate the opening of airspace resources and streamline approval procedures for low-altitude flights. This will unlock new scenarios including low-altitude logistics and urban management. Similar new opportunities can also be found in service robots and other sectors, all of which will create new space for private investment," Chen said.

By deepening reforms to further unlock investment potential, China will ease market access in the service sector, speed up revisions to the Bidding Law and the Government Procurement Law, and advance price reforms to broaden investment access for more enterprises.

"We will see a new round of investment potential unleashed. Major projects including the national water network, a new round of power grid upgrades, new generation communication networks, and computing power networks will drive massive investment, including demand from urban development. In addition, the campaign this year to expand and upgrade the service sector and the development of emerging industries will further expand space for private investment," Chen noted.

China to take measures to boost investment, expand space for private investment in 2026: official