Companies eye launching commercial rockets in China

By Liang Fei Source:Global Times Published: 2016-3-21 17:48:01

In China, there has been growing interest in commercial space transport service and satellite development. During the annual legislature session, which ran from March 5 to 16, a State-owned firm announced its intention to start a commercial rocket launch service in 2017, making it the first State-owned company to do so. Private firms are also looking into the industry, and some have secured venture capital funding. Experts said launching commercial satellite is a promising but challenging industry, in terms of technology and capital, especially for private firms.

SpaceX, a US-based space transport services company, launches its upgraded Falcon 9 rocket carrying a 5.3-ton communications satellite on March 4 at the Kennedy Space Center, in the US. Photo: IC

The success of US space transport services company SpaceX, which has the US National Aeronautics and Space Administration (NASA) as a client and successfully returned a rocket to Earth in December, has inspired companies from both China's State-owned and private sectors.

State-owned China Sanjiang Space Group (CSSG) plans to offer commercial rocket launch services with its carrier rocket, the Kuaizhou-11, in 2017, the company's chief model designer Hu Shengyun told Xinhua on March 15 at the sidelines of the annual legislative session.

CSSG is the first State-owned company to show interest in a commercial rocket launch service.

Hu, who is also a national legislator, said a dedicated company will be set up and a certain Internet giant has shown interest in the project, according to the report.

There have been guesses that the Internet giant might be search giant Baidu Inc, because Robin Li Yanhong, founder of the firm, proposed in 2014 to the National Committee of the Chinese People's Political Consultative Conference, the country's top political advisory body, that private firms should be encouraged to enter the satellite and rocket industries.

When contacted by the Global Times on Thursday, Baidu declined to comment on the matter.

An underdeveloped industry

China has more than 140 satellites in orbit at present, ranking second in the world after the US, Beijing-based China Youth Daily reported in November 2015, citing Tian Yulong, chief engineer at the State Administration of Science, Technology and Industry for National Defence.

But the commercial space industry remains underdeveloped in China. In the US, commercial satellites account for more than a half of the satellites in orbit, according to the Xinhua report on March 15. China has yet to secure a sizable space for itself in the market.

However, over the next few years, China's satellite industry is expected to see rapid growth, especially in the area of small satellites, experts said.

Small satellites, which typically weigh less than 1,000 kilograms, can also be used in telecommunications, navigation and imaging, but at much lower costs, experts said.

Northeast China's Jilin Province launched the country's first commercial high-resolution optical Earth observation satellite combo in October - the Jilin-1 - which consists of four small satellites.

The province plans to have 60 small satellites in orbit by 2020. The Jilin-1 was launched at the Jiuquan Satellite Launch Center in Northwest China's Gansu Province.

"As the sector grows, demand for commercial launch services will also grow, creating opportunities for commercial launches," Fu Song, a professor at the School of Aerospace Engineering at Tsinghua University, told the Global Times on Sunday.

Fu noted that universities such as Tsinghua and Zhejiang University could also serve as potential customers for commercial rocket launches because they are researching small satellites.

"Some national satellite projects may also turn to commercial launch companies in the future," Fu said.

Private firms join in

The space industry's potential has drawn the interest of private firms.

One Space, founded in August 2015 by a graduate of China's major aerospace college, Beihang University, said that it is planning to launch its first rocket in 2018, media reports said.

The company's major shareholders include Legend Star, an investment arm of IT giant Legend Holdings Corp, venture capital firm Chun Xiao Capital and HIT Robot Group, a company controlled by the Harbin Institute of Technology and the government of Northeast China's Heilongjiang Province.

In December 2015, One Space announced that it has secured 10 million yuan ($1.5 million) in angel investor funding.

Shu Chang, founder of One Space, declined an interview request from the Global Times on Thursday, citing the sensitivity of the issue.

But according to a report on industry portal in January, Shu was upbeat on the prospects of the industry, as it grows increasingly open to private firms. Demand for launch services is also expected to surge in the future.

Shu is also eyeing space transportation services. China aims to build its own space station by 2022, which could increase the need for related transportation services, the report said.

High thresholds

But challenges always accompany opportunities. The high technical threshold and capital demand of the aerospace sector make it difficult for private firms to survive, experts said.

SpaceX has already encountered several setbacks. Although the company has raised around $1.2 billion from investors, it has almost gone bankrupt twice since it was established in 2002.

"[One Space's] financing of 10 million yuan is tiny compared with the amount of money needed in the foreseeable future, not to mention technological and regulatory challenges," a professor at the School of Aerospace Engineering at Tsinghua University, who declined to be named, told the Global Times on Friday.

An official surnamed Wang who works at a State-owned satellite firm expressed doubts about private firms' prospects in the field.

"If one plans to invest into the sector, I'd say, 'be cautious,'" Wang said on Thursday, noting that the sector remains dominated by the government.

For private firms that are eyeing satellite manufacturing, the potential may also be limited, Wang noted.

"Telecommunication and navigation satellites usually require technologies beyond the capacity of small firms, while in terms of imaging satellites, the sector is still tightly monitored by the government," he said, adding that it would be wiser for private firms to start with conducting research on satellite applications or related material research.

Fu also admitted that it would be hard for private firms to gain a foothold in the satellite or commercial launch sector in the near future.

"It's not that it's unlikely that a SpaceX-like firm will be developed in China, only that it will take a very long time," Fu said.
Newspaper headline: Out-of-this-world opportunities

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