The Year in Chinese Space
Plus more Sino-Egyptian satellites, several milestones from Landspace, and some funding from Chengdu and Henan 🛰️ 🚀 🇪🇬
Dear Readers,
Happy Holidays, and thanks for making it to the end of the first year of the China Space Monitor! It’s been a wild year to cover Chinese space, and as to be expected, December was one of the craziest months yet, with a bunch of launches, the year’s biggest funding round, and some intriguing announcements.
Before we get into the month that was, our feature article dives into the year that was, leveraging data from Orbital Gateway Consulting and our China Space Database and research products. This year saw records for Chinese space industry activity including rockets and satellites sent to orbit, and while funding cooled down compared to previous years, it remains a decent time to raise money as a Chinese space company, especially if you have a mature and well-defined business model. Let’s dig in.
2023 in Chinese Space: Rapid Change
The Numbers: China sent 213 payloads into orbit in 2023, an increase from 182 in 2022 and 111 in 2021. These were sent on 65 rockets, also an increase from 63 in 2022 and 52 in 2021. CGSTL was the leader among satellite manufacturers with 48 satellites launched during the year, however CASC would take the lead if we combined all of its subsidiaries (CAST and subsidiaries had ~40, while SAST had 24). Around half of the satellites launched by China this year were manufactured by commercial companies, if we define commercial as anything that is not CASC, CASIC, or other wholly SOEs. All things considered, the total for 2023 is less than I would have expected—at the beginning of the year, I said that “China could launch as many as 300-400 satellites this year”. Well crap. We’ll see if this relative plateau continues into 2024, though at the risk of sounding like a broken record, my bet would be on more satellites.
As space became more important worldwide, it has become more important as a tool of international relations in a Chinese context. 2023 saw 6 countries sign on to the ILRS (Azerbaijan, South Africa, Belarus, Pakistan, Venezuela, Egypt), and saw entities such as China Great Wall Industry Corporation (CGWIC) get back into the habit of hosting large international conferences at their palatial HQ in Beijing, while meeting with heads of foreign space agencies abroad. China was a major participant at the IAC in Baku in October, and Chinese companies were present at a variety of space conferences attended by yours truly around the world.
Funding saw an interesting dynamic. Overall funding levels dropped by around 40% compared to the peak years of 2020-2022, but remained strong at ~¥5.6B, or ~$800M. With that said, average funding round size was the biggest we’ve seen in any year, by far. With only 21 funding rounds in 2023, the average round was a whopping ¥266M, with the next-highest average in any given year being ¥196M in 2020. This is likely a reflection of the consolidation happening in the Chinese commercial space sector. Several years ago, anyone in the Chinese space sector with an idea and a PowerPoint could attract funding. Today, investors are being more discerning, looking for cash flows, business models, and superstar management teams. We heard as much in an October 2023 interview with Peng Yuanyuan, Co-founder of Ubinexus and former Co-founder of Commsat. Peng noted that “investment in the commercial space sector is not cooling down, but is in a period of adjustment. The market and investors are becoming more rational and pragmatic. Now, instead of looking at the PPT, I’m asking you where are your core technical capabilities? What are your products? What are your plans and markets?”. In short, the Chinese space companies that have had early success have had an easier time raising more money.
Arguably the best example of this is Galactic Energy, with the commercial launch company having succeeded in launching 10 of 11 Ceres-1 rockets to orbit over the past 4 years, at an accelerating pace. After succeeding 6 times out of 7 in 2023, the company capped off the year with a ¥1.1B ($154M) funding round this month, the biggest round we saw this year. Presumably part of the reason that the company was able to raise so much money is because they have, up to now, pretty much delivered, having launched 35 satellites into orbit since 2020.
On the topic of launch, rideshares became more important over 2023, as China seeks to stay in the same universe as SpaceX as it relates to launch cadence. 2023 saw the record for most satellites launched on a Chinese rocket broken twice in one month. First, on 7 June, CAS Space sent 26 satellites into orbit on its ZK-1A from Jiuquan. Just about a week later on 15 June, SAST sent a whopping 41 satellites into orbit on a LM-2D, with all 41 built by Chinese remote sensing company CGSTL for their Jilin-1 constellation. In 2024, we should expect to see a number of rideshare rockets ramp up their cadence, including the Jielong-3, ZK-1A, ZQ-2, and several Long March launch vehicles. Coupled with multiple satellite factories ramping up capacity (GeeSpace just sent 11 satellites out from their factory this week), we should see sustained growth in the number of satellites launched by China in 2024.
These rideshare launches will become useful as China plans to launch its own global non-geostationary (NGSO) communications constellations, namely Guowang (“China’s version of SpaceX”), and potentially smaller NGSO comms constellations such as G60 and Galaxy Space. Over the course of 2023, the number of companies striving to launch these constellations from China increased, as the government signaled greater openness to private sector participation. This included the MIIT publishing a document in October signalling openness to private investment into the telecoms sector, while also calling for gradual reform in the satellite internet space. Other signals included the Shanghai Government publishing a 2023-2026 New Infrastructures Development Plan in October, which included support for the G60 constellation and Smart SkyNet constellation (Chinese version of O3b).
What to Expect in 2024?
Next year is likely to see continued buildout of infrastructure, but also increased emphasis on applications and using existing infrastructure. On the new buildout side, expect to see initial deployment of China’s NGSO broadband constellations, likely via batches of satellites launched for China SatNet, Galaxy Space, or SSST.
At the same time, we should see the application layer start to mature. Once GeeSpace’s aforementioned 11 satellites are launched, the company will have more than 20 satellites on orbit, likely allowing them to hit the ground running on enhanced GNSS application R&D using Geely automobiles. Remote sensing juggernaut CGSTL now has >100 satellites on orbit, and a data library that is growing rapidly and finding new customers (including some less savory ones).
Next year in Chinese space we might see:
The first official announcement of a foreign astronaut going to the Chinese Space Station, and more additions to the roster of ILRS participants
Several more space unicorns as a handful of maturing space companies continue to take the lion’s share of investment dollars
Commencement of NGSO broadband constellation launches by China SatNet
An average of one rideshare mission per month, with commercial launch companies accounting for ~half of these missions
A significant international launch customer signing a deal with a Chinese commercial launch company
Less certain, but arguably more interesting, is whether 2024 will see a continuation of the “opening up” trend that we have seen in recent years. This is bucking a national trend in China of the government playing a more active role in economic management, and as such, I have my concerns about whether the state-run Chinese space sector will continue to expand opportunities for commercial companies in the future. In any case, one thing is pretty much certain: 2024 is going to be another dynamic and exciting year in the Chinese space sector.
And in other news from the China Space Sector this month
The year ended with a bang, as 12 rockets sent 29 satellites into orbit during the month of December. Among others, a few of the highlights included 2x BeiDou backup satellites, a few Shiyan satellites, and a couple of commercial Starpool satellites for Ellipspace. The BeiDou satellites were the 2nd and 3rd launched this year, and since the 3rd-generation BeiDou constellation was completed in 2020. They were sent to MEO, and apparently had miniaturized many different technologies as compared to the previous couple dozen 3rd-gen BeiDou satellites launched to MEO.
December also saw 8 more Tianmu satellites launch in batches of four atop two Kuaizhou-1A rockets. This marks 18 Tianmu satellites launched in total, with the somewhat mysterious CASIC/commercial space consortium project aiming to gather data on the ionosphere, sea surface wind fields, and thermosphere. The 8 satellites launched in December appear to have been manufactured in Wuhan along with the two rockets, however there are also claims from Shenzhen Magic Cube, a commercial space endeavor with links to CASIC, to have manufactured the satellites. The satellites also involve the Xiyong Microelectronics Industrial Park all the way in Chongqing, via CASIC subsidiaries established in the city. In any case, the project clearly has substantial support from CASIC, and we should hear more in 2024.
Landspace announced the company’s ZQ-3 rocket, while also chalking up another successful launch of the ZQ-2 during the month. On the ZQ-2, which was the third attempt for the medium-lift rocket, were 3 satellites, notably Spacety-33, Honghu-1, and Honghu-2. Landspace announced plans to launch 3x ZQ-2s in 2024, 6x in 2025, and 12x in 2026. December also saw an interview with Landspace CEO Roger Zhang Changwu, where he noted that Landspace is developing the ZQ-3 rocket, with planned maiden launch for 2025. The ZQ-3 is expected to have a payload to LEO of at least 12.5t (recoverable stages), and as much as 21.3t (expendable version). This would clearly mark a step-change in China’s commercial launch capabilities.
China launched another joint Sino-Egyptian satellite, MisrSat-2, onboard a LM-2C. This is the third joint Sino-Egyptian satellite of 2023, following the Horus-1 and Horus-2 satellites launched earlier in the year. The satellites are part of a bigger program for China to build a satellite assembly, integration, and testing (AIT) center in Egypt, which has been going on for several years.
On the topic of China-Egypt, following our prediction last month about Egypt (or long-shot Brazil) being the next country to sign onto the International Lunar Research Station (ILRS), Egypt promptly….became the next country to sign onto the ILRS 🇪🇬 😎 The announcement was made during an MoU signing between Zhang Kejian (CNSA) and Sherif Sedky (Egyptian Space Agency COO). The MoU also called for cooperation between the two countries in deep space exploration, spacecraft development, space infrastructure, and satellite data.
GeeSpace dispatched a batch of 11x satellites from the company’s Taizhou factory. The space industry subsidiary of automotive giant Geely launched a batch of 9x satellites in June 2022, and plans for the next batch of 11 to launch from Xichang in Q1 2024 🚗 🛰️ The constellation is expected to provide enhanced navigation and other connectivity services to Geely’s fleet of cars, which could also include subsidiaries such as Volvo and Proton, as well as (maybe) companies in which Geely has a substantial minority stake (Daimler). The latest satellite announcement from GeeSpace reaffirmed the company’s stated goals of 72 satellites on-orbit by the end of 2025, which seems plausible if they’ve reached this rate of batch manufacturing.
Galactic Energy raised a massive ¥1.1B (US$154M) funding round during the month, with the funding to be used to develop their Pallas-1 medium-lift rocket, expected to debut in late 2024 🚀 The funding round caps a big year for the company, with 6 successful launches of their Ceres-1 rocket out of 7 attempts, successfully sending 21 satellites to orbit and cementing their title as China’s leading commercial launch company (for now).
The city of Chengdu and province of Henan set up space industry support. Henan set up a Satellite Industry Fund (actually announced on 29 Nov) with ¥401M ($56M), with investors including local government funds, SOEs, and data platform company PIESat. Chengdu published a Chengdu Satellite Internet and Application Development Plan (2023-2030), which for dedicated readers, is available in all of its 55-page glory from the Chengdu Municipal Government, in PDF form, at the link here. Digressing, we have two more city/provinces specifically publishing support for space/satcom, and making money available for its development under their jurisdiction. And these two join a list of a couple dozen (though admittedly its not the first we’re hearing from Chengdu or Henan).
And that about brings us to the end of the China Space Monitor for the year. Signing off for the last time in 2023, thanks for reading, and Happy New Year!
Blaine
Excellent summary but surely the FOB craft deserves a mention?
Thanks! Anything to note on the defence side?