A Match Made Under Heaven: The Emerging Role of China’s Private Sector in Space

Trustee Chair in Chinese Business and Economics  >  Trustee China Hand   

U.S.-China competition in space is playing out across multiple fronts, from human spaceflight missions like Artemis II to launch and satellite systems that underpin economic and military power. Within this sphere, China’s military-civil fusion initiative is channeling commercial innovation into the country’s dual-use capabilities, as covered in the recent Trustee Chair report, The Power of Innovation: The Strategic Value of China’s High-Tech Drive. Space launch is one such capability, where the private sector’s work on reusable rockets could significantly accelerate China’s deployment of space infrastructure. 

Chinese private firm LandSpace, founded in 2015 under China’s national MCF strategy, is emerging as a major player in China’s efforts to develop reusable rockets. In December 2025, the company attempted the country’s first-ever launch of a reusable rocket, the Zhuque-3 (ZQ-3). Although LandSpace failed to recover the launch vehicle, the mission still achieved several key objectives. According to one of their recent company presentations, LandSpace will attempt another launch in Q2 2026 and attempt to relaunch the recovered vehicle in Q4. Additionally, LandSpace aims for the ZQ-3 to be capable of supporting 20 launches per year by 2027. 

China’s push to develop reusable rockets as part of its MCF strategy reflects a broader effort to accelerate the deployment of dual-use space infrastructure, especially in low Earth orbit (LEO). Both the United States and China deploy groups of interconnected satellites, known as constellations, in LEO as dual-use space infrastructure. LEO constellations can conceivably enable both civilian use cases, such as telecommunications, as well as military use cases, including early missile-warning and space-based weapons.  

Open-source data show that roughly half of China’s payloads in 2025 were satellites for two state-backed LEO constellations, Xingwang (星网), also known as Guowang (国网) or SatNet, and Qianfan (千帆). Xingwang’s listed civilian purposes include supporting broadband Internet services, Internet of Things (IoT) devices, and future 6G networks. However, according to scholars at RAND, it could also serve as an asset for the People’s Liberation Army (PLA). Furthermore, PRC analyses, such as a July 2025 piece from the PLA Daily, reflect the strategic importance Beijing places on LEO constellations for military communications and intelligence transmission. This PLA Daily article highlights the pivotal role of U.S.-based SpaceX’s Starlink constellation in the Russia-Ukraine conflict and makes clear that Beijing also treats LEO space infrastructure as a strategic priority in its military modernization.  

Chinese sources and the “General Catalog of Artificial Space Objects” dataset maintained by astrophysicist Jonathan McDowell show that the discrepancy between China’s goals and performance in satellite launches is substantial. China plans to launch 12,992 satellites for Xingwang, over 15,000 for its Qianfan constellation, and close to 10,000 for its Honghu (鸿鹄) constellation. By the end of 2025, China had only managed to launch 136 satellites for Xingwang, 108 satellites for Qianfan, and 2 test satellites for Honghu. Starlink, on the other hand, had a fleet of 8,163 satellites in operational orbit in December 2025.  

The United States built its lead in space-launch technology over China and others through reusable rocket technology developed by private firms SpaceX and Blue Origin, which has lowered satellite deployment costs and increased launch tempo. As Figure 1 shows, this advantage has become stark. While China’s launch capabilities are growing, the United States—driven in large part by SpaceX’s Starlink deployments—far outpaces China in successful payloads launched. In 2025, the United States launched over 10 times the number of payloads, 3,720 to 371. Still, the United States’ extensive reliance on a single private firm for space infrastructure could also be a disadvantage in the long term. Although China continues to lag the United States in launch capacity, progress in reusable rockets could enable China to rapidly deploy its multiple planned constellations, potentially challenging Starlink’s scale. 

China recognizes its critical need to develop reusable rockets to compete with the United States in deploying LEO constellations. An article from Science and Technology Daily explains why rocket launch vehicles are a bottleneck to Beijing’s strategic imperative to deploy space infrastructure. Orbital slots in LEO and spectrum are scarce resources that will underpin the future of China’s strategic technological development in 6G. Therefore, the International Telecommunication Union’s (ITU) “first-come, first-served” approach to licensing these space resources and the requirements for timely satellite launches have heightened China’s sense of urgency to quickly close the gap with the United States. 

China’s gradual progress in space reflects a broader pattern of MCF-driven advances across several dual-use sectors, including artificial intelligence, unmanned drones, and shipbuilding. As discussed in The Power of Innovation, Beijing has found ways to connect commercially relevant firms with state capital, building innovation ecosystems for dual-use technologies. While the U.S. private ecosystem, particularly through SpaceX, has proven more successful to date, China’s incremental progress with LandSpace suggests that the country’s MCF strategy could eventually yield substantial results in the coming years. For U.S. policymakers, a clearer understanding of how today’s MCF ecosystem supports China’s military modernization will be essential to shaping future U.S.-China commercial engagement, including how the United States should restrict ties to PLA-linked firms while keeping controls targeted, principled, and credible. 

Related Trustee Chair Activities   

Scott Kennedy, The Power of Innovation: The Strategic Value of China’s High-Tech Drive, CSIS Report, March 2, 2026.  

Event: “China’s Great Tech Leap Forward and the Implications for the United States,” March 2, 2026. 

Scott Kennedy, "China’s COMAC: An Aerospace Minor Leaguer," CSIS Trustee Chair Blog, December 7, 2020. 

Scott Kennedy and Audrey Fritz, “China's Military-Civil Fusion Funds: Big but Not Necessarily Effective,” CSIS Trustee Chair Blog, October 4, 2019.