Private Capital Threatens China's State Monopoly in Aerospace
Qian Tongxin
/SOURCE : Yicai
Private Capital Threatens China's State Monopoly in Aerospace

(Yicai Global) July 12 -- As private capital firms set their sights on the aerospace sector, the number of private firms in the industry has skyrocketed on the back of technological breakthroughs, and the government's monopolistic grip of the field could be coming to an end.

Multiple companies have made moves this year to gain a foothold in the emerging private spaceflight industry. LandSpace, a private rocket launch service provider, has completed designs of the medium-sized liquid oxygen-methane rocket carrier ZQ-2, which is expected to be China's largest payload carrier. A maiden flight is planned for 2020.

Another firm in the sector, OneSpace, launched China's first private suborbital rocket and aims to carry out up to 10 launches next year.

Satellite Launches Driving Demand

The number of private aerospace enterprises is surging in China with technical breakthroughs being made constantly. Linkspace, OneSpace, iSpace, LandSpace and ExPace, among others are emerging spaceflight carrier service providers.

These private aerospace startups look to benchmark themselves against Elon Musk's SpaceX. "As the first private company that launches independently research rocket, we are very similar to the early stage of SpaceX," OneSpace Chief Executive Shu Chang told Yicai Global.

In terms of the reasons for private capitals preferring commercial rocket launch firms, Yang Feng, founder of nano-satellite startup Spacety told Yicai Global that "without satellite research and development and launch demands, the existence of commercial rocket companies would be meaningless."

"Demand for satellite launch services is booming in China, and over 20 nano-satellite companies incorporated in the past few years," he added.

Many satellite investments come from local governments and there is room for private companies to get involved, Wang Jianyu, Executive Deputy Chief Designer of the Mozi quantum satellite, told Yicai Global. "If more private satellite companies are established in the future, there will be increasing cooperation opportunities available for rocket launch enterprises," he added.

Wang disclosed that as for the development of the quantum communication technology invested by the government, a network of satellites will be set up using non-governmental and private sources.

Low-Cost Satellite Launches

Compared with SpaceX, Chinese private aerospace enterprises are still freshmen, though the speed of development has been fast.

Given the expenditure, private aerospace enterprises can shorten their research period in every feasible way, Wang said, adding that their research and development processes are faster than state companies.

"Private enterprises looking to run aerospace businesses will never succeed without leveraging funding and development speed," he said. "Each company has their own solutions to achieve this. For example, some might conduct changes in R&D processes."

OneSpace allotted three years for the research and manufacturing of its first rocket, though it actually only took one year. "We are advancing at an ultrasonic rate indeed, it would have taken us a decade to achieve this goal in the past," Shu said.

Like many private startups focusing on the commercial aerospace market, OneSpace regards the launch of multipurpose satellites able to carry out meteorological work and scientific experiments as a major task. "Building up one's own spatial network is a key trend now, and we are currently in the stage of preparation and planning."

Liquid Fuel Tech Breakthroughs

Private aerospace enterprises' efforts to gain competence in the launch of large-sized satellites and manned space missions involve the development of liquid fuel technologies.

In this respect, private aerospace enterprises are also speeding up their work. Last week, Landspace demonstrated its latest medium-sized liquid oxygen-methane carrier rocket ZQ-2 in Beijing.

"The 100-ton liquid oxygen-methane engine technology unveiled by Landspace will be a milestone in China's private aerospace industry," said Wu Zhijian, president of China Space Foundation. "As an emerging power in aerospace, these growing private rocket launch companies will help to significantly cut the threshold and cost of launch, boosting the commercialization of the entire aerospace industry."

ZQ-2 is a 26-ton two-stage liquid-filled carrier rocket, 48.8 meters in length and with a take-off thrust of 268 tons. Transport capacity in 500km sun-synchronous orbit is two tons, and four tons for 200km near-earth orbit. Though its transport capacity is still far off SpaceX and Blue Origin, it has been able to send two large-scale SUVs into space concurrently.

Supplementary Role of Private Players

Though Chinese private aerospace enterprises could catch up with SpaceX competition in the sector remains a show of a country's strength, Wang says. Therefore, the role of private aerospace enterprises is merely a supplement, especially considering their high capital requirements.

"Space technology is no longer something mysterious and raising hundreds of millions of yuan to launch a satellite is no longer a tough task. However, those material projects still have to rely on our national strength, as the required investments of resources and capitals are not on the same level," he added. 

Nevertheless, the engagement of private capitals does help to facilitate the development of space tech. "Advance our technologies and keeping costs down under the national system will be a slow process," Wang said. "In contrast, private capital is more efficient undoubtedly, and their ideas outside the box are more innovative."

It is now feasible for private aerospace enterprises to start experimental verification services for rocket launch considering the demand for satellite installations, he says. Once launches are verified as reliable and safe, companies can delve deeper into the field.

Editor: William Clegg

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Keywords: Space Exploration , Rocket Launch Service , Private Investment , R&D , Industry Analysis