The success of China's first manned spaceflight is absolutely pulling up the country's space industry. Researchers estimated that the output value of China's space industry will reach 100 billion yuan (US$12 billion) by 2005.

"China's satellite manufacturing industry faces the dilemma of low manufacturing and research abilities and high demands," a researcher of China Academy Of Space Technology (CAST) pointed out.

"As for communications satellites, except DFH-3, China now uses lots of foreign satellites, like ASIASAT-1, ASIASAT-2, ASIASAT-3S, APSTAR-1, APSTAR-1A, APSTAR-2R, CHINASTAR-1 and SINOSAT-1, etc. Meanwhile, the world's space powers now try to expand their market share, while more and more developing countries have advanced in space technologies, causing fierce competition, " he added.

In 2002, the State Development Planning Commission (the current State Development and Reform Commission) decided to develop seven key industries, each of them expected to have an output value of 100 billion yuan (US$12 billion) by 2020. Among these are the production of integrated circuit (IC) industry which will reach 100 million yuan in the next five or six years, and there should be about 70 production lines by 2020; 3G telecommunication; Internet and related industries, which, now the second largest in the world, should become the largest by 2020; digital TV, including program-making; satellites for live broadcasting, which should form a chain industry; and the manufacture industry, which, including software production, should further develop to become the center not the factory of relevant industries in the world. All these industries are closely connected with space industry.

Li Shifeng, secretary of the board of chairmen of China Spacesat Technology Co. Ltd, said that satellite manufacturing and launching require high technologies and are most difficult in the chain of space industry. Usually, the manufacturing expense of a satellite is about US$120 million, while the expense for a rocket is about a quarter of satellite cost, about US$30 million. The expense for satellite launching is about US$30 million, and the insurance costs about US$36 million. The cost of launching a small satellite of 500-520 kilograms is about US$35-45 million, including the launching expense of about US$15 million. It is only one fifth of that of a large rocket.

Li said that China Spacesat has been supported by the government. In 2002, the former State Planning Development Commission invested 300 million yuan (US$36 million) in the DFH Satellite Co. Ltd to set up the National Engineering Project Research and Application Center. Meanwhile, its subordinated AeroStrong Technology Company established the GPS pilot project. The ratio of revenues from satellite manufacturing, launch and use is about 2:1:7.

"The main client of the satellite business is the government, instead of enterprises. Satellites are mainly below 1,000 kilograms, considering the huge input, " he said.
 
A survey shows that about 1,000 satellites will be launched in the next 10 years, and they will be used for communication, resource survey, weather broadcast, GPS and satellite constellation. Seventy percent of them are commercial satellites. The merger and acquisition (M&As) of space enterprises, to coordinate the military, civil and commercial use of space technology, will be the limelight in the future.

(China.org.cn by Tang Fuchun October 30, 2003)