The Belt and Road Expands to Space
Plus ZTE establishes a satellite internet subsidiary 🛰️ Galaxy Space's CEO makes an appearance with President Xi 🏛️ and a dodgy contract announcement from USPACE 💲
Dear Readers,
Happy Friday, and because I liked the phrase so much last year, congratulations on getting through the first beer (or soda) of the 6-pack that is 2025. Lots to cover this month including a rocket recovery ship planned for Hainan and Galaxy Space CEO (and known insider trader) Xu Ming appearing with major tech CEOs at an event hosted by Chinese President Xi Jinping. But first, a look at the oncoming wave of Chinese space activity abroad.
China’s Space Belt and Road: Right Place at Right Time
The Belt and Road Initiative (BRI) is a massive infrastructure development plan being rolled out by China across much of the world. A pretty vague term, the BRI brand name can be attached to just about any major Chinese project in any number of countries, whether it’s dry ports in Kazakhstan, power plants in Pakistan, or a sea port in Ecuador. And a surprisingly long time ago (all the way back in 2019, possibly earlier), China has spoken about a Belt and Road Spatial Information Corridor, or in plain English, a Space BRI.
But for some time, we’ve seen limited progress on the Space BRI, which I suspect can be chalked up to the fact that Chinese state-owned space incumbents are busy, and the main subsidiary of CASC responsible for international business, China Great Wall Industry Corporation (CGWIC) is a relatively small company that cannot be everywhere at once. This lack of progress is starting to change, in a big way.
What’s Causing These Changes? The Push Factor
There are push and pull factors to these changes. On the push side, we have a rapidly-growing commercial space sector in China, and while many of these companies are domestically-focused, many are not. Some of them, most notably companies like SpaceSail, may not even be able to address the domestic market yet due to a lack of landing rights. A small percentage of the hundreds of Chinese commercial space companies founded since 2014 are going abroad, but this still leads to a lot of companies. And in no month to date has this been more clear than February 2025.
In the satellite internet space, this month saw agreements between SpaceSail and Malaysian GEO communications satellite operator Measat, as well as Galaxy Space and Thai telco True Corporation. Both agreements call for satellite communications technology testing, and in the case of Malaysia, some Q/V-band testing in areas with heavy rain attenuation.
In launch, we saw leading Chinese commercial launch firm Galactic Energy announce agreements with Germany’s FEM-Composites and Malaysia’s Distant Blue Aerospace during a High-Quality Development conference in Beijing. Under the MoUs, Galactic Energy seems to be a launch service provider for the two companies, though for FEM-Composites this would likely be not for satellites, but for testing composite materials.
Star.Vision, a Satellite payload manufacturer and one of the most internationally-active Chinese commercial space companies, showed up at the African & Middle East Space Conference in Morocco, where they met with Chairman of the African Space Agency Dr. Tidiane Ouattara, while also making reference to an agreement with an unnamed Ghanaian entity. Just a few days earlier, fellow satellite manufacturer Magic Cube, via Chongqing subsidiary Kaituo Satellite, hosted a group of students from the UAE’s Khalifa University for a cubesat project.
In a deal that provided some possibly imaginary but still concrete numbers, Hong Kong company USPACE announced a US$21M contract with “Treefam Holdings LLC”, a UAE-based company, for 600 satellites (a borderline laughable cost of US$35,000 per satellite). The deal, which is characterized as a “contract”, has an opt-out clause whereby “in the event that either party does not confirm the purchase within 15 days of the signing of the Contract, the Contract becomes ineffective and will not entail any burdens or penalties for either party”.
It’s not clear what might happen in the ensuing 15 days that would cause either company to change their mind, but we note that USPACE’s share price got a nice 10% boost following the deal before crashing back down to earth (back in the day they called this a pump and dump). But I digress, another example of Chinese commercial space aggressively pushing abroad. Later in the month, USPACE also announced a Malaysian satellite factory under the imaginatively-named “MSPACE” brand. At least one keen-eyed observer claimed that the below factory photo looks photoshopped, but assuming it is not, this would be likely the first overseas satellite factory of a Chinese commercial space company. Lots of ongoings on the Belt and Road.
Finally, in satellite ground equipment, this month saw terminal manufacturer Starwin get its Ka-band terminals qualified by the good folks at ArabSat, this following similar qualification with Spain’s Hispasat, UK’s Avanti, and Malaysia’s Measat. Starwin also showed off a plethora of international customer meetings, seemingly at their Chengdu headquarters, during the month.
The Pull Factor
If domestic factors have pushed Chinese space companies out to BRI countries, international pull factors have accelerated the move. Namibia saw a visceral example of this earlier this month when a massive ground station was unveiled by the CAST 503rd Institute. Emblazoned with the words “CHINA AID FOR SHARED FUTURE”, the ground station was unveiled just as USAID is being dismantled in Washington DC. It’s not clear to me if China Aid was directly involved in building satellite ground stations, the message is clear enough: as the US’s developmental footprint abroad shrinks, there is a power vacuum that China is happy to fill.
Back in Shanghai, this month saw a Saudi delegation visit the Shanghai Engineering Center for Microsatellites (SECM), one of the leading satellite manufacturers in China. Saudi Arabia remains a big customer of US space hardware, but the visit is also likely an indication of the Kingdom hedging their bets, especially at a time when the new US administration is asking for investment of one trillion dollars.
And finally, in case you were wondering what it costs to ship a lunar rover to the moon, this month we saw a $5B deal between CASC and the UAE to send the latter’s Rashid-2 rover to the Moon on the Chang’e-7 mission. This comes about 1 year after UAE officials noted that they were “looking into all options” to get Rashid-2 to the moon. Unspoken is the fact that the new US administration is currently angling to shelve its Lunar ambitions in favor of an accelerated roadmap to Mars.
What Does This Mean Moving Forward?
Ultimately, the near-term winners here will probably be everyone other than the US and China. China will likely subsidize a certain amount of this activity either directly (like the CHINA AID ground station) or indirectly (via industrial subsidies that make Chinese satellites and rockets cheaper), and the US will probably lose out on soft power to China’s gain.
In the near-term we should expect to see a continued outpouring of Chinese commercial space companies, with more companies showing up at more international conferences. In April 2025, the China Space Day Conference will be held in Shanghai. Long a blue-chip conference for foreign dignitaries, this year is likely to attract even more foreigners given the connectedness of Shanghai to the rest of the world.
In the longer-term, it’s probably not as rosy. Space is a hard industry in which to make money, and BRI projects in more well established and profitable industries have run into trouble because of excessive debt (just ask Pakistan or Sri Lanka). Time will tell, but it’s an open question whether projects like a massive satellite factory in Egypt will ever be economically viable.
In any case, the trend is not in question, and this month represented an acceleration of a bigger trend: the internationalization of Chinese commercial space, and the beginnings of a real Belt and Road Spatial Information Corridor.
And in other news this month
Galaxy Space CEO Xu Ming was the only space industry representative to appear at a forum hosted by Xi Jinping on 17 February. Other attendees included the CEOs of Huawei, Alibaba, and Tencent, with the event being spun as an endorsement of the private sector more broadly.
Telecom equipment manufacturer ZTE established a subsidiary focused on satellite internet, Shanghai Puzhan Science & Technology, with a registered capital of ¥500M. ZTE is a massive company with revenues of US$17B in 2023, and their involvement in the satellite internet space would clearly accelerate the integration of satellites and terrestrial networks.
On the topic of Belt and Road, the ChinaSat-10R satellite was launched on February 22nd. The satellite will replace ChinaSat-10 and offer coverage of Belt and Road regions (this according to the official press release) from an orbital slot of 110.5E. The satellite included a bunch of new bells and whistles from CAST, reach out to us for more info.
Several tenders were awarded for the construction of a reusable rocket recovery ship to be deployed at Wenchang Space Launch Site in Hainan. This included tenders for the ship itself (CSSC) and telemetry system (CETC 54th Institute). As we’ve recently discussed, Wenchang is home to a growing cluster of space activity.
The Yizhuang Economic and Technological Development Zone of Beijing is home to most of China’s commercial launch companies (and also state-owned launch juggernaut CALT). During an event in Yizhuang, Secretary of the Zone’s Working Committee Zhang Qiang claimed that commercial launch firms based in Yizhuang would conduct more than 40 launches in 2025 sending more than 130 satellites into orbit. My take: it’s ambitious, but just barely plausible (assuming it excludes CALT. If including CALT then 40 is a certainty). My over/under for Yizhuang launches in 2025 excluding CALT is 26.
In an indication of the still tight launch supply in China, SpaceSail announced two tenders for 9 launches of 162 satellites, and had to cancel them both after only two companies submitted bids (spoiler alert: they were CASC subsidiaries CALT and SAST). Calling for 4.5 tons of payload to 800km LEO, none of China’s plethora of commercial launch companies were able to answer the call, at least not yet, indicating the limitations of China’s commercial launchers today. The tenders were also, however, an indication of SpaceSail’s obvious financial might: 9 rockets are damned expensive, as in multiple hundreds of millions of US$ expensive.
And finally, not quite space, but leading drone manufacturer DJI announced a “MiniSAR” drone system offering resolution of up to 0.2m. With a maximum battery life of 55 minutes and weight of as little as 2.7kg, the product should, at a minimum, expand the number of entities familiarizing themselves with the benefits of SAR data.
That’s all folks, if you’ve made it this far, a big thanks for reading. What do you make of these pull and push factors? Do you see things differently?
Let me know, and thanks for reading!
Blaine Curcio