A ‘Chinese Starlink’ Launches New Era For Domestic Space Industry

Executive Summary:

• A commercial company has become the first enterprise in the People’s Republic of China (PRC) to launch a batch of internet satellites into low-Earth orbit. PRC media has framed this “Qianfan” constellation as one of the country’s principal competitors to SpaceX’s Starlink.
• The success of Yuanxin Satellite—also known as Shanghai Spacecom Satellite Technology Ltd (SSST)—follows policy and regulatory changes in recent years to stimulate a more dynamic commercial space sector in the PRC.
• China SatNet, the state-owned company behind the Guowang constellation project, does not have a clear timeline for deploying its own answer to Starlink. This could be partly due to corruption problems, both within the company and in the state-owned space sector more broadly.

At 14:42 on August 6, a Long March 6 (LM-6) carrier rocket took off from the Taiyuan Satellite Launch Centre in Xinzhou, Shanxi Province (Xinhua, August 7). The rocket carried 18 satellites—the first official batch of the Qianfan (千帆) constellation—into orbit. Qianfan, formerly known as “G60,” constitutes an initial response by the People’s Republic of China (PRC) to Starlink, the private satellite internet constellation operated as a subsidiary of Elon Musk’s commercial space venture SpaceX.

The company behind the launch, Yuanxin Satellite (垣信卫星)—also known as Shanghai Spacecom Satellite Technology Ltd (SSST)—is not a state-owned enterprise (SOE). This is surprising, as SOEs usually take precedence in the unveiling of new, strategic technologies. Analysts therefore have described the August development as “the most significant commercial launch in Chinese space industry history” (The China Space Monitor, August 31). A confluence of factors led to SSST winning the race to launch a constellation of internet satellites in non-geostationary orbit (NGSO). These include problems in the state-owned constellation sector coupled with an explosion of activity in the burgeoning commercial sector. The initial trigger for PRC efforts in this area has been the launch and dramatic expansion of Starlink since 2019. The PRC’s space sector is still centrally controlled, but the emergence of a more dynamic commercial sector indicates that Beijing is learning how to successfully combine government direction with market forces (China Brief, November 20, 2023).

The PRC Mobilizes in Response to Starlink

The rise of the PRC’s commercial space industry has been meteoric. From its origins only a decade ago, it has now attracted billions of dollars of investment and encompasses hundreds of companies across the value chain. Most of these firms are concentrated in urban clusters dotted around the country (The China Space Monitor, June 30, 2023). This partly comes from a loosening of the regulations that govern the industry. As Beijing has come to see space as a strategic industry and pivoted to focusing vast resources on advanced technologies, attempting to catch up with Starlink has become a priority.

PRC state media makes clear that its American competitor is a motivating factor. A Xinhua article published this week states that Starlink “has proved in practice that giant constellations are economically viable, and that low-orbit satellite constellations are expected to become a new generation of globalized information infrastructure, whose occupants will be given a monopoly position of dominance.” It goes on to note that the company has launched over 6,000 satellites into low-Earth orbit (LEO) within the last five years, and plans to launch 42,000 in total (Xinhua, September 3). As an American company whose products have direct military applications (as seen in conflicts in Ukraine and Sudan, for example), Starlink is also perceived as a threat to PRC national security. A Beihang University professor noted in March that Starlink “has brought unprecedented pressure to our country” (WeChat/C114 Communications Network, March 7).

Space has traditionally been the domain of the People’s Liberation Army (PLA). All of the PRC’s launch sites are controlled by the military and retains ultimate authority over most space activities (China Aerospace Studies Institute [CASI], March 1, 2021). This has begun to change in the last decade, as President Xi Jinping hopes for the PRC to become the world’s foremost “space power (航天强国)” by 2045 (Xinhua, January 28, 2022). Some of the more significant developments have occurred in the last five years. In 2019, the State Administration of Science, Technology, and Industry for National Defense (SASTIND; 国家国防科技工业局) and the Equipment Development Department of the Central Military Commission (CMC), published regulations that allowed private space companies to obtain permits from the military for launches. That same year, government policies began to encourage foreign investment in the PRC’s space sector (National Development and Reform Commission [NDRC], June 30, 2019). Then, in 2020, the NDRC added satellite internet to its list of strategically important digital infrastructure and called for “upholding taking market investment as the primary source (坚持以市场投入为主)” (NDRC, April 29, 2020).

Pursuit of a “Chinese Starlink” kicked off soon thereafter. In April 2021, China Satellite Networks Group Limited (中国卫星网络集团有限公司; China SatNet) was born (36Kr, July 1). China SatNet, the operator of the state-owned constellation Guowang (国网; GW), was long believed to be the frontrunner in the race to deploy a “Chinese Starlink,” not least because it had enormous backing from the state.

It is unclear why China SatNet has fallen behind some of the commercial alternatives, though corruption in the state sector could be part of the story. In March 2023, the Central Commission for Discipline Inspection (CCDI) announced that China SatNet was a target for investigation (MOJ, March 28, 2023). This led to the replacement of the company’s general manager (The Paper, April 9, 2023). Several months later, news emerged of the removal of senior industry figures from the Chinese People’s Political Consultative Conference (CPPCC). These included Chairman and Party Secretary of the China Aerospace Science and Technology Corporation (CASC) Wu Yansheng (吴燕生), Chairman of Norinco and former Chairman and General Manager of China Aerospace Science and Industry Corporation (CASIC) Liu Shiquan (刘石泉), and CASIC Deputy General Manager Wang Changqing (王长青) (Caixin, December 27, 2023).

Any problems that may have befallen the state sector have done little to dent the PRC’s progress, however. 2023 saw the country launch 213 payloads into orbit, an increase from 182 the previous year and 111 in 2021 (The China Space Monitor, December 30, 2023). In the first half of 2024, PRC companies have sent 88 spacecraft into orbit after 29 successful launches. This represents an increase over the previous year in terms of launches (though not in terms of satellites). The last twelve months have also seen further efforts from the state to stimulate the industry. In October, the Ministry of Industry and Information Technology (MIIT) released a draft opinion that included plans to “promote the reform of the satellite internet business in steps … and expand the scope for private enterprises to participate in telecommunications business” (MIIT, October 10, 2023). This signaled an opening for commercial enterprises to take on a larger role in the country’s satellite internet plans. In February, SSST announced the industry’s largest-ever funding round, raising nearly $1 billion from Shanghai government entities, national-level funds, the Chinese Academy of Sciences, and various private investors (China Venture, February 1). In July, the Decision document from the Third Plenum called for “promoting the development of strategic industries such as … space flight (完善推动 … 航空航天 … 等战略性产业发展政策和治理体系).” Under the section on deepening reform in the military, the document also focused on strengthening coordination in the space sector (State Council, July 18).

The launch of the Qianfan constellation satellites in August is the latest data point that suggests the PRC’s nascent space sector is beginning to hit its stride. The sector still has problems, as the launch also exemplified—the breakup of the rocket carrying the satellites led to a cloud of over 700 pieces of debris in LEO. This is a relatively minor blemish on a remarkable achievement, however, and will not perturb the program’s trajectory. Before the launch had taken place, Genesat (上海格思航天科技), the company manufacturing the satellites, had already announced that the second batch had been completed and were ready to be launched (WeChat/Genesat, July 26).

Conclusion

In the years ahead, the PRC’s space sector is expected to grow dramatically, according to industry projections and ambitious national plans. While its satellite internet projects—of which Qianfan and Guowang are the most prominent—remain far behind Starlink, the capacity for the industry to grow is substantial. This includes expansion overseas. The PRC space sector already has strong ties with countries around the world, particularly among One Belt One Road (OBOR) nations. PRC SOEs are partnering up to help create “space cities” in Abu Dhabi and Egypt, and has brought a number of its traditional partners on board with its International Lunar Research Station (The China Space Monitor, April 30).

The military angle remains top of mind for the PRC’s planners too, making it unlikely that any competition with Starlink will be fully settled in the commercial domain. As research from the CASI has shown, PRC scientists are already investigating ways to “incapacitate a large portion of Starlink satellites” in order to retain “space superiority (空间优势)” (CASI, June 3). Geopolitical competition now has entered the space domain. How explosive that competition will be, however, rests among politicians on the ground.