China & The US in Space - Competition or Collaboration?

Feb 18 / 2021
Written By Karol SPerczyński
The six-or-so decades that passed since the beginning of the space age have brought countless developments into the ever-changing world of spaceflight. In the years following the remarkable achievements of the 60s and the 70s, the nature of the space economy has evolved dramatically, and it is no longer just the government-funded space agencies that actively participate in space, but rather thousands of companies that build the applications which power our everyday world. The trend of far-reaching commercialization of the space industry has led to the establishment of a myriad of businesses that, over the years, improved upon earlier designs or created entirely new technologies which partially define some of the current trends in space. And although it is the US companies that are most prominently mentioned as disruptive in the global space economy, the reality is that major providers of space assets & spaceflight options are scattered across the entire globe. As the pursuit for space revolves around the idea of rapid innovation and finding new solutions, even countries that, compared to the US, have little experience in the space industry, may become major rivals in this prospective field over the next few years - and China is no exception. It’s fair to say that the swift changes in the space market encourage the question of “What will happen in the coming decades?”. How may the future of US-China space relations look like, how will private and public entities treat each other, and what's more feasible: an international collaboration or a global competition?
What’s the Chinese sector like?
Briefly about PRC's space sector
Over the last few years, we have seen quite a few changes in the Chinese space sector. For one, more and more attention is given towards the novelty which is the growing demand for space-based applications. The international space market can provide multifarious high-tech information industries with additional ways to expand and offer more services. This is one of the reasons why the Chinese government sees the growth of the domestic space market as an essential step in building the future of the national economy. The PRC's space sector now relies not only on state-owned companies but on start-ups and other privately established enterprises. We see increasingly more movement in the space industry, as more and more launch vehicles are tested, and more payloads are launched into orbit every few months. The test flights of new rockets, such as i-Space's Hyperbola 1 or CALT’s Long March 8, provide the ongoing space program with crucial data on how to improve the vehicles' designs and integrate concepts such as partial or almost-full reusability into already existing spacecraft. The recent advancements already improved the country's access to space and the trend of growth seems to continue. Despite all the new developments, however, the Chinese space industry still lags behind the world’s biggest space economies due to the program not having seen mass progress until quite recently. Paul S. Szymanski, a veteran analyst of space warfare, stated:
“The Chinese are starting from scratch,” “They’re not,” he added, “hindered by long space traditions.”
With a fast pace of technical development and appropriate interest in the space market, the Chinese space sector may catch up to the newest trends of rocket reusability & rapid access to space relatively soon. The current growth of the industry is most likely to continue over many of the coming years, bringing a multitude of innovations onto the Chinese market. It’s even possible for PRC's space economy to eventually overtake the US’s, owing to reasons such as the much larger population of China and the market demand that comes with it, as well as the centralized decision making of the Chinese state, which could ease the domestic industry’s growth, yet offer some different challenges in the process.
Hyperbola-1 rocket

Image source:
nasaspaceflight.com
China's strengths and weaknesses
As with any economy, the Chinese space sector has its strengths and weaknesses that play a major role in shaping their present & future on the global space market. As of 2018, the current growth of PRC's space industry could be linked to many different factors such as a well-educated workforce and high availability of capital that create an efficient work environment within the sector. A major part of the space industry’s personnel is reported to be rather younger people with only up to a few years of experience, that, however, rely heavily on creative thinking and are ready to embrace long working hours and give their best. The idea seems to be that the space sector needs not many years of experience, but rather innovation and dynamic adjustment to the current situation. Furthermore, the growth of Chinese space businesses is promoted by the government through policy support or financial investments from state-owned entities that see the development of national space technologies and the growth of domestic companies as very beneficial to the future national space economy. Another strength of the Chinese space market could be that it’s largely unencumbered by foreign competitors, which could potentially allow local businesses to seize the domestic space industry and significantly grow in the process. Moreover, the noticeable lack of reliance on foreign technologies is, in itself, partially beneficial for PRC's space industry as it forces Chinese companies to develop their own capabilities and technologies, which may allow for them to be less dependent on other countries in the future.

However, with the Chinese space sector still having relatively little experience, private or government-backed space entities lack some of the important business and technical know-how that US or European companies already have. Reportedly, various companies don’t have the market expertise necessary to fully optimize their services to best suit their customers as they don’t yet fully understand the inner workings of the space market. This, of course, changes with time, however, it could take long for Chinese corporations to well understand the space economy and truly prosper. This effect is further amplified by the restrictions imposed on collaborating with foreign corporations and reduced information flow between Chinese & offshore companies. This can lead to some of the firms not having access to cutting-edge technologies and information currently used by companies in other markets. This is one of the reasons why domestic companies, so far, have rather aimed for working with less well-developed markets, such as Southeast Asia or Africa. Another problem for PRC's commercial space could be the fierce competition between startups and state-owned enterprises, as certain parts of the space industry, namely satellite communication services, are mostly occupied by government-owned entities, and Chinese businesses don’t see a clear way to enter such a market.

The lastest launch of the Long March-4C rocket

Source: xinhuanet
The foreseeable future of US-China space relations
How the situation is most likely to evolve over the next few years
The Chinese space economy has big growth potential, yet it still needs some time to adapt to the principles of new space. So far, Chinese companies have rather focused on improving their reach in the domestic space market as it has a large potential for future expansion and allows them to worry less about competing with foreign entities or facing market restrictions. Although some could argue that the more government-steered space economy of China lives a completely different life than the world’s highly competitive space markets with many already-developed companies, it still paves the road for more technological developments, in a way sort-of similar to how NASA in the 60s didn’t need to directly compete with the USSR on American turf, but rather enjoyed state-backed growth in the US whilst technologically competing with them in space.

The restrictions laid upon exchanging data and working with non-Chinese companies mean that the US-China space situation is more likely a case of an intercontinental competition rather than building up the industry through collaboration with businesses that already have the space expertise. PRC has largely limited other markets’ impact on the domestic space economy as a way to hopefully give it time to grow before having to compete with already well-established companies. This, however, means that as of now larger-scale space cooperation between US & Chinese space businesses is rather unfeasible. Foreign companies don’t currently have much to say in the matter of the Chinese space market, and it’s hard to expect a much different response from the US space economy. China has already built up crucial foundations for the future growth of their space sector and plans to move away from relying on foreign solutions, for instance, by deploying their own space station into orbit, assembling it in part even this year. This will most likely help speed up the development of the domestic space technologies, as well as allow China to have bigger control over what research is carried out, removing the foreign-entity dependency factor from the equation. This means that the US and Chinese markets are currently moving away from each other and heading into a future competition, with no sign of commencing economical space cooperation any soon.

So far, the current trends hint that the Chinese space market might remain locked for foreign companies for years to come, as China prepares to better its capabilities in space without having to rely on foreign businesses. The rapid development of Chinese space technologies, a market that isn’t accessible by US companies, the establishment of the Chinese space station, as well as the ongoing competition between the largest economies in the world, the US and China, all mean that it’s quite likely that the current state of affairs will carry on for quite a bit longer, and extend far into space.

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