Launching rockets and satellites has long been the preserve of China's state-owned aerospace companies, but private space firms are now popping up hoping to find gold in the space dust.

A report by Beijing-based investment institution FutureAerospace says more than 60 private Chinese firms have entered the commercial space industry over the past three years, focusing on the production and launch of satellites and rockets.

Most of the companies are based in Beijing, home to many space experts, as well as Guangdong, Shaanxi and Hubei provinces, where the manufacturing industry is more developed.

This follows a government policy issued in 2015 to encourage private enterprises in space.

Analysts say commercial space activity could help lower costs and increase efficiency of space activities, and accelerate the technology development.

China's SpaceX?

Companies like SpaceX, Blue Origin and Virgin Galactic are developing cost-effective carrier vehicles with the aim to make space travel possible for ordinary people. They have also inspired Chinese entrepreneurs.

Founded in June 2015, LandSpace, a private rocket-maker, has gained investment of more than 500 million yuan (about US$78.61 million). Its technicians are former state-owned aerospace industry workers.

"This is the best time for China's commercial space companies. The core advantage of private firms is rapid decision-making and rapid technical upgrading," said Zhang Changwu, CEO of LandSpace, which signed a contract with a Danish firm this year to provide launch services.

LandSpace has designed a small solid-propellant rocket that can carry up to 300 kilograms into a low-Earth orbit. It is expected to come out of the factory in the second half of 2018. The company is now focusing on developing a liquid-propellant engine and a medium-sized rocket fueled by liquid oxygen and methane.

LandSpace is not alone in the launch market.

When Shu Chang declared three years ago he would produce rockets, his acquaintances said he was crazy.

Braving questions and mockery, he set up OneSpace in August 2015. Four months later, SpaceX launched the Falcon 9 rocket and recovered the first stage of the rocket for the first time.

Some praise Shu as China's Elon Musk, but some call him a swindler.

With investment totaling 500 million yuan, OneSpace has developed a rocket engine that passed factory trials. Its first mini-rocket, capable of sending a 100-kg payload to an altitude of 800 km, is expected to launch soon.

"SpaceX has inspired China's space industry. But I don't want to duplicate the SpaceX story. I want my company to have our own advantages," Shu said.

Rising stars

Producing satellites is believed to have a lower entry threshold and greater commercial potential than rockets, and has attracted many start-ups and investment.

With the development of autonomous driving, the Internet of Vehicles and the Internet of Things, remote sensing and communication satellites are said to have a lot of good prospects.

SpaceOK, a Shanghai-based firm, plans to produce and launch up to 40 small communication satellites in the next three years to help develop the Internet of Things.

"We aim to solve the problems of the traditional aerospace enterprises, such as a lack of innovation, high costs and insufficient application of satellite data," said Wang Yang, CEO of SpaceOK.

"We also support the state's Belt and Road Initiative, and will use our satellite data to service countries along the Belt and Road."

The value of the global space market is estimated to reach US$485 billion in 2020, when the value of China's space market is projected to be 800 billion yuan (US$125.78 billion).

About two thirds of global satellite orders will come from commercial customers in the next decade.

Lured by the promising market, Chinese space companies recently unveiled a series of programs to produce and launch small and micro satellites.

"We hope these programs accord with the nation's top-level plan," said Li Guoping, a spokesman of the China National Space Administration (CNSA).

Government support

"We especially encourage social capital to invest in the satellite application sector," said Li.

"The output value of the satellite application sector makes up over 80 percent of the whole satellite industry chain. So we encourage private companies and social capital to invest in the application of satellite communication, remote sensing and navigation," he said. "When we make a top-level plan for China's aerospace development, we will consider the development of commercial space activity. The government will open space programs that can be carried out in a commercial way, and buy services from commercial companies."

State-funded basic frontier research projects that used to be carried out by state-owned research agencies and large enterprises will also open to qualified private firms.

"We support the development of rockets by private firms at a certain level, but their research, production and launch must be in accordance with the nation's regulations," Li said. "We are formulating guidance to promote the orderly development of the commercial space industry in China."

Tian Yulong, secretary general of the CNSA, said the development of the commercial space industry will help improve China's competitiveness in the international market.

The government will improve safety supervision, and nurture new commercial space companies that are competitive internationally, Tian said.

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