What's Really Happening in Hainan?
Plus SpaceSail in Kazakhstan 🇰🇿, a plethora of new launch companies 🚀, and some dismal PIESAT financials 💲
Dear Readers,
Happy Lunar New Year, and may the year of the snake bring you good times with good people. This month, we saw more progress from Chinese space companies on the international front, a slew of new launch companies, and more. But before digging into that, a look at a place more often known as the “Hawaii of China”, Hainan, and its rapidly-evolving space sector.
Backgrounder: The Hawaii of China
Hainan is an island off the southern coast of the Chinese mainland. A relative economic backwater, it was not even its own province until 1988, at which time it was carved out from Guangdong Province, located just across the Qiongzhou Strait (there’s even a train that goes onto a ship to cross the strait).
In the ~35 years since becoming a province, Hainan has remained economically under-developed, with a per capita income in the bottom half of Chinese provinces and with the island’s most famous company undoubtedly being the ill-fated HNA Group. But sandy beaches and famed chicken and rice, combined with the rise of domestic tourism in China over that time, have helped make the place a famed tourist destination, among other things. Today, Hainan is home to some 10M people (less than half the size of Shanghai), mostly concentrated in the provincial capital of Haikou, and the smaller city of Sanya.
Hainan’s Space Industry Heritage
Despite its relative lack of development, Hainan has a few very important attributes from a space perspective:
It’s the southernmost point in China, making it a great place from which to do launches. This is due to the rotational speed of the earth being faster at the equator, and in the case of GEO launches, due to the fact that these satellites eventually end up just above the equator, so there is less need for adjustment of orbit post-launch.
It’s an island, which makes it convenient for transporting large rockets or satellites. This is especially true compared to, say, Xichang Launch Center, located in a mountainous part of Sichuan Province.
Rockets launched from Hainan can be sent over the open ocean. This is preferable because other launch sites (sorry to pick on them, but once again Xichang) are located near populated areas, creating risk for people downrange.
These attributes led to the decision in the mid-2000s to build China’s 4th launch site at Wenchang, on the eastern fringes of Hainan island. At the time this was an extremely ambitious project: an undeveloped backwater province with limited power infrastructure, few major roads, and essentially zero rocket scientists, or space companies of which to speak, was to be home to China’s fourth 4th launch site. The local government got to building, and the Wenchang Space Launch Center began to rise from the coastline.
In 2016 we saw the first launch from Wenchang Space Launch Center, with a Long March-7 rocket taking 6 spacecraft into orbit. Since that time, Wenchang has seen, by our count, 34 launches, of which 32 have been successful (the unlucky ones being Shijian-18 and XJY-6). At the same time, the site has become a tourist hot spot, with Chinese (and some foreign) space fans making pilgrimages to Wenchang, especially for launches of China’s largest rocket to date, the LM-5. These pilgrimages have become something of a meme in the Chinese internet, with my favorite example being the Xi’an Symphony Orchestra setting up, dressed to the nines, on the beach to play music during a launch. Quite a sight. These launches have primarily been quite literally fly in, fly out, with rockets and satellites being built somewhere else in China, being shipped to Wenchang, and then being shipped to orbit. Very little industry to speak of at the launch site.
So a quick review: until the mid-2000s, there was no space industry in Hainan. Starting in the mid-2010s, there began launches from Wenchang, in particular of the very big rockets that are built by CALT in the port city of Tianjin (it’s easier to transport big rockets on barges than on trains). During that time, the place has become something of a pop culture phenomenon, with even Hilton Hotels setting up shop near the launch site. And yet, until recently Hainan’s space sector was largely reliant on stuff from outside: rockets and satellites get shipped in, integrated, then shipped out at many kilometers per second on a big rocket. This is starting to change.
What Are they Building in There?
The past few years have seen Wenchang take a front-and-center role in the development of China’s space industry. Because of the geographic advantages mentioned above, Wenchang has been slated as a major launch site for China’s large non-geostationary communications constellations (“China’s version of Starlink”), as well as its large space exploration missions (Chinese Space Station, lunar and Mars missions, etc.) As a result, the launch site has been expanding both in terms of number of launch pads, and more surprisingly, satellite manufacturing capabilities.
First, the rockets: in addition to existing launch pads at Wenchang, there are multiple commercial launch pads under construction and in planning. The first and second commercial launch pads are expected to commence operations within this year, and in early January we saw plans to accelerate the construction of launch pads 3 & 4. The new launch pads are meant to be compatible with 19 commercial rockets (though a Xinhua report from late 2024 mentions “more than 19”), and in 2025 there are plans for 20 commercial launch missions.
To fill all these launch pads, Wenchang is also attracting a variety of commercial launch companies to set up shop there, sweetening the deal with the fact that Hainan has been designated a Free Trade Zone (自贸区). The list of companies is lengthy and includes a who’s who of leading commercial launch companies such as iSpace, Galactic Energy, Landspace, Space Pioneer, and CAS Space. And with all these launch companies setting up shop, we’ve seen more supporting infrastructure put into place, including propellant fueling systems and bigger roads.
All this is good news, but there may be one small caveat: it will be hard for any one launcher to ramp up capacity in the near-term. The launch pads are compatible with ~19 rockets, and with plans for 20 launches in 2025, the math is not hard: around 1 launch per rocket. Probably half of those 19 rockets will be ready to launch in 2025, so let’s say 2 launches per rocket in 2025. This is chump change compared to the ~2 launches per week that SpaceX plans for the year, and is too small to make reusable rockets practical. Medium-term, the max number of launches from Wenchang might reach mid-high double digits, which is getting somewhere, but nonetheless there will be the challenge of scaling up, especially given the lack of supporting infrastructure on the island. Long-term these are solvable issues, but they are complex and multifaceted, and will require money, patience, and a heck of a lot of coordination.
In addition to rockets, Wenchang has plans for satellites: the Wenchang International Space City has been building for ~1 year a “satellite superfactory” with an envisioned capacity of 1,000 satellites per year. A 23 January report in the Hainan Daily indicated that the factory would be put into production within 2025, while earlier reports have characterized the factory as “SatNet Compliant”, clearly indicating an intention to build satellites for China’s state-owned response to Starlink.
Local officials have made curious statements about the superfactory, implying that the production line space will be available to a variety of satellite manufacturers. An article from early 2024 noted that companies such as CAST, SAST, Galaxy Space, and CGSTL have signed on to use the production line. And, in the above image we can see in the top left hand corner of the building the logo of Wenchang International Space City, a local government project. This implies that the factory is owned by the city, and that the city as the landlord is renting out production line time to a variety of satellite manufacturers. A different approach to most satellite factories, to be sure.
Time will tell the success of the satellite factory, but for now, we are seeing satellites and rockets shipped into Wenchang and launched into space, while at the same time seeing an explosion of activity from satellite and rocket manufacturers entering the province. All of this activity is combining to create quite the cluster. Earlier this month we saw an announcement for a “Satellite-Rocket Interconnection Center” at Wenchang (rendering below), indicating big plans for integrating satellites and rockets, and another step forward for industrial activity to take place directly in Wenchang, rather than in Beijing, Tianjin, or elsewhere.
What will the future hold for the Wenchang Space Launch Center? The easy answer is “more launches”. The more nuanced answer is that this small island with a reputation for coconut milk and some of the world’s best cold chicken is likely to continue developing a space industry cluster. My first time to Hainan back in 2019 involved a tour of some space-related facilities in the provincial capital of Haikou. At that time, I was struck by the number of (admittedly small-scale) foreign businesses that had set up on the island because of the Free Trade Zone status. In the future, maybe the space cluster in Wenchang will become a magnet for foreign space enterprises. Maybe we’ll start seeing foreign rockets signing up to launch from launch pads 3 & 4.
Until then, I’ll be waiting for the next live performance of the Xi’an Symphony Orchestra overlooking the South China Sea.
And in other news this month
SpaceSail continued its march towards a global communications constellation a là Starlink, with 18 satellites launched on 23 January. The company also continued to make commercial progress, setting up a subsidiary in Kazakhstan. Kazakhstan is noteworthy because Starlink is already in the midst of connecting nearly 2,000 schools in the country. Let’s see how this plays out.
The General Manager of China Telecom Group, Liang Baojin, was transferred to China SatNet on 17 January. Chinese-language press made the move out to be very sudden and unexpected, with Liang having only been promoted from Deputy GM to GM of China Telecom about 6 months ago. Admittedly being unfamiliar with the executives of state-owned telcos, Chinese media touts Liang as a very competent manager, and the move can likely be interpreted as a signal of the growing urgency being assigned to SatNet, as well as a desire by Chinese leadership to see SatNet integrate more closely with the country’s state-owned telcos.
Chinese space industry blogger Hello Space published a piece on the country’s up-and-coming launch companies, of which they identified 10. This is pretty remarkable given that, in addition to these 10, there are another 30-40 older and more well-established commercial launch companies in China. Respect for the chutzpah of the founders of companies like “Astronstone” and “Green Rocket”, both of which were founded just last year. Given the speed at which Chinese commercial launch firms are moving, starting one’s company when others have had a 10-year head start is gutsy, bordering on lunacy.
Leading geospatial imagery platform company PIESAT reported a ¥1.4B loss for 2024, with new orders declining by 18% and government business being basically flat. The company’s share price is in the midst of a multi-year decline of ~75% from its all-time high, hit in April 2023, and their market cap has slid to well under US$1B (currently ¥4.52B, or $620M). The pain is an indicator of how difficult it has been for Chinese remote sensing data companies to drum up commercial business, and possibly a sign that government business is drying up, or at least plateauing.
Commercial spacecraft manufacturer AZSpace picked themselves up and dusted themselves off following the December 2024 failure of a rocket carrying their first spacecraft. The company announced plans for 4 spacecraft launches in 2025, with one each in July and November and 2 in September. That a commercial company can develop a spacecraft is an example of the broadening scope of what can be done “commercially” in China’s space sector, with spacecraft having historically been reserved for the SOEs.
Several weeks after SpaceSail’s satellite communications tests in Hong Kong, Galaxy Space announced similar tests, with the company using a Ka-band terminal to achieve speeds of up to 30 Mbps. Their terminal appears to be hosted at a larger ground station site in the New Territories of Hong Kong, most likely the HQ of APT Satellite, or less likely, the HQ of AsiaSat, located just across from APT Dai Kwai Street.
And finally, Star.Vision announced a flurry of international activity, including an MoU with the Kyrgyz National Technical University of Kyrgyzstan, and a meeting with several Gabonese government officials. As a reminder, Star.Vision is to some extent a combination of the Zhejiang University small satellite manufacturing team, and former ZTE overseas salespeople, making the company a potent force for overseas Chinese space activities.
With that, thanks for reading, and see you next month!
Blaine