Why the Chinese Space Market is often Ignored, and why it Probably Shouldn’t be
Ask almost any Western aerospace professional about China, and you'll likely get a very predictable answer. Suspicion, uncertainty, or even dismissal. And these feelings are fairly understandable, considering there is essentially zero direct collaboration between the U.S. and China in the space domain.
In the 1990s, as China’s space capabilities as we know them today were still developing, the U.S. passed a series of laws that essentially halted private sector space cooperation with China. These came in the form of reclassifying commercial communications satellites to fall under International Traffic in Arms Regulations (ITAR). These changes came in conjunction with several economic sanctions and made it extremely difficult for U.S. companies to export satellite components to China or to launch satellites on Chinese rockets. These restrictions were later compounded by the now-infamous Wolf Amendment in 2011, which explicitly prohibited NASA from using federal funds to engage in bilateral cooperation with China or Chinese-owned companies without prior congressional authorization.
The cumulative effect of these policies was a nearly complete severance of institutional ties between the U.S. and Chinese space sectors. Unlike the post-Soviet period, when NASA and Roscosmos built frameworks for collaboration through the International Space Station, no such normalization ever occurred with China. Instead, American firms were pushed to disengage, and the U.S. space ecosystem was forced to treat China not as a potential partner, but as a strategic competitor.
This policy decision fundamentally shaped the West’s perception of China’s space ambitions, and essentially created a form of collective psychosis among industry experts and investors. Without cooperation, there was no data-sharing, no joint missions, and no mutual visibility into respective milestones. Western media rarely covered Chinese launches in depth. And investors and analysts in Silicon Valley - or anywhere for that matter - had little reason or ability to track what Chinese companies were building, let alone participate in their growth.
The result? For much of the past 25 years, China’s space sector has operated in a de facto geopolitical blind spot. It wasn’t trusted, and thus it wasn't covered. It wasn’t covered, and thus it wasn’t understood. And it wasn't understood, thus it was underestimated.
But that blind spot is becoming increasingly harder to justify.
Image Credit: China National Space Administration
Rather than decreasing the speed of Chinese development or eliminating the competition altogether, the isolation of China’s space sector from the West has arguably accelerated its independence, self-reliance, and ambition. Cut off from American technology, launch markets, and joint missions, China was forced to build its space infrastructure from the ground up, and it did so methodically. What began as an underfunded, domestically focused program is now a fully-fledged ecosystem encompassing heavy-lift rockets, planetary science, human spaceflight, and increasingly, commercial ventures.
In 2003, China became just the third nation in history to independently launch humans to orbit - an achievement that has only been built upon since. Over the last two decades, China developed and launched its own orbital laboratories (Tiangong-1 and Tiangong-2), developed automated docking, established a crew training pipeline, and constructed a permanently inhabited modular space station of its own, called Tiangong.It has carried out complex robotic lunar missions, including soft landings and sample returns from the far side of the moon - something American companies haven't been able to replicate. In 2021, China landed a Mars rover (Zhurong) on its very first interplanetary mission, making it just the second nation after the U.S. to do so. Perhaps most notable, however, is the speed at which these feats are being accomplished. While detailed data on the Chinese National Space Administration is not always available, it's likely that the rapid success of the program when compared to the U.S.’s is in large part due to top-down political alignment, centralized funding, and long-term strategic planning that together characterize China’s state-driven approach.
Unlike in the United States, where projects are often subject to shifting political administrations, budgetary battles, and competing contractor interests, China’s space priorities are embedded within broader national development goals. Five-year plans, civil-military integration policies, and high-level directives from the Chinese Communist Party (CCP) have ensured continuity, consistent investment, and a singular strategic vision. And now, after two decades of state-led acceleration, China’s space sector is beginning to pivot, cautiously but deliberately, toward a hybrid model that incorporates private enterprise, venture investment, and semi-commercial industrial ecosystems.
This shift was made possible by a series of regulatory reforms beginning in 2014, when the State Council issued a directive (Document 60), which opened the door for private capital investment to enter the space sector. This marked the first time that non-state entities could legally invest in or operate space ventures in China. Since then, China’s commercial space ecosystem has expanded rapidly. U.S. government resources speculate that by the end of 2022, there were over 430 registered commercial space companies operating in China. These, of course, range in levels of development but include satellite manufacturers, data providers, launch vehicles, and much more.
Image Credit: Shujianyang
The U.S. still leads the world in private space investment by a large margin - accounting for nearly 60% of global space-related VC funding, while China falls in second. China’s commercial space market more than doubled from $113 billion in 2019 to $268 billion in 2023, and is expected to reach $900 billion by 2030. Additionally, for the first half of 2024, China briefly overtook the United States in total venture funding for space technology startups, before falling back into second place by Q3, with $2.1 billion raised compared to the U.S.'s $2.7 billion.
Yet despite this staggering growth, China’s space sector remains chronically underexamined in Western discourse - geopolitical narratives still dominate the conversation. But ignoring the Chinese space market doesn’t make it go away. In fact, it makes it harder to understand and harder to respond to. And harder to engage with - economically, technologically, and diplomatically. And while much of China’s space ecosystem remains state-aligned, the rise of commercial players, the influx of venture capital, and the scale of technical progress all suggest that we are no longer dealing with a monolith. We are witnessing the maturation of a parallel space economy - one that is increasingly capable, well-funded, and globally ambitious. Understanding the Chinese space market isn’t just a matter of curiosity or strategic geopolitical posturing; it’s a prerequisite for competing in, partnering with, or even accurately analyzing the next phase of the space economy. While China may be isolated from American collaboration, it is not isolated from progress. And in the vacuum left by Western disengagement, an entire industry is taking shape - quietly, rapidly, and with implications that will reach far beyond orbit.
Conor Devlin 07/22/2025
All opinions expressed are personal in nature, and do not necessarily reflect the views, policy objectives, or goals of any government, business, or other entity.