While China's national space program frequently dominates headlines, a significant transformation at the local level is reshaping its broader space strategy. Provincial governments are actively implementing policies to cultivate commercial space industries, positioning their regions as key players in this expanding sector. This surge follows the central government's designation of commercial space as a strategic emerging sector in late 2023, formalized during the 2024 “Two Sessions” in Beijing.
This has intensified the creation of regional commercial space clusters across China, including in major cities like Beijing, Shanghai, Wuhan, and Guangzhou. Competition is fierce, with provinces vying to attract space startups and integrate space applications such as Beidou and remote sensing. New initiatives involve tax incentives, subsidies, the development of industrial clusters, and even the construction of commercial spaceports.
Examples of this decentralized approach include Wuxi city's focus on “5+X” future industries, including commercial space, and Zhejiang province's support for commercial space alongside quantum information and other technologies. Shanghai, already having a defined action plan, is pushing for international development of its space industry, acknowledging the current dominance of domestic demand. However, challenges exist, as evidenced by the terminated IPO of Changguang Satellite Technology, highlighting the difficulties some companies face.
Beijing's 100-billion-yuan ($13.9 billion) commercial space cluster, the development of Xiong'an's space information roadmap, and Wenchang's expansion of its commercial spaceport, including plans to become a “space tourism capital,” illustrate the scale of investment. Guangdong's plans to foster space manufacturing and Yangjiang's planned Guangdong (Yangjiang) Space Launch Center are further examples of this regional competition.
Provinces like Hubei are focusing on integrating Beidou and remote sensing, while Anhui aims for rapid economic growth through investments in deep space exploration. Heilongjiang is accelerating its space sector development, including spacecraft manufacturing. “China’s provincial policies in support of so-called New Space need to be seen as a major contributing factor to the emergence and current flourishing of the Chinese commercial space industry,” says Marco Aliberti of the European Space Policy Institute (ESPI).
Aliberti emphasizes the strategic and economic rationales behind this provincial support, noting that it's not only a status symbol but also integral to China's civil-military integration strategy and international power projection. He also highlights the increasing need for internationalization, as reliance on domestic demand might limit growth. Provincial support is seen as a way to develop new applications, foster innovation, and diversify the economy, potentially challenging established European and American companies in emerging markets.
The intense competition for investment and talent, coupled with the rise of satellite megaconstellations and efforts to form international partnerships, will shape China’s commercial space sector. Challenges such as competition with SpaceX, supply chain issues, and regulatory uncertainty remain. 2025, the final year of the 14th Five-year plan, will see the formulation of the 15th, setting new objectives and potentially revealing new ambitions for China's space sector in a new white paper.