Welcome back to China NewSpace, your weekly dose of the Chinese private space industry. If you haven’t subscribed yet, sign up here.
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This week: China is Marsbound, the space economy might be half as big as you think it is, and Russia cozies up to China.
Some housekeeping announcements:
It fits my schedule better to release this newsletter on Mondays rather than Tuesdays (although it will be earlier in the day than today’s, promise), so expect future issues on Mondays.
But more important — I have decided to broaden the scope of the newsletter. With as much exciting stuff that’s happening in the official Chinese space program, I can’t keep my attention entirely on the private sector.
I still think that the future of space is largely private, and I plan to maintain my focus primarily on private companies, but you can expect to see more about both the state-owned commercial sector as well as government scientific programs.
However, with a broadening in scope, China NewSpace no longer seems entirely appropriate. Starting next week, the newsletter will be renamed Taikonautica, so please don’t be confused when you see it in your inbox!
This is Us
I want to take a moment of personal privilege to say that while space is an area of international competition, and I believe that we are witnessing the beginnings of a new space race, that whatever we do in space represents all of humanity.
The Chinese government has done things which I deplore. I do not often identify myself with China. But when Tianwen-1 launched from Hainan on July 23, it was not just China taking another step towards Mars. It was all of us. This is one of the greatest things that we do.
How big a market?
I read an IDA report recently that got me thinking a lot about market size. Basically, the report makes the argument that the actual size of the space economy is about half the size of a lot of other estimates out there (I’ll break that down in a bit).
So I spent the last couple weeks digging into what numbers Chinese institutions are using. Interestingly, they tend to use the estimates that Western institutions arrived at that IDA disputes.
First: The IDA Report
Just this March, four researchers at the Science and Technology Policy Institute of the Institute for Defense Analyses, a DC area think tank, released a report titled Measuring the Space Economy.
In the report, the researchers argue that the estimates of the size of the space economy given by organizations such as the Satellite Industry Association, the Space Foundation, and the OECD overestimate its true size, showing it to be about twice as large as it really is.
This chart neatly summarizes the gist of their findings (STPI is the report’s estimate):
They give two reasons for the difference.
They use a smaller, more conservative definition of what kinds of activity count as the “space economy”
They exclude certain activities because they believe including those activities leads to double counting
Regarding double counting, the report divides the space economy into four categories: government expenditures, space services, the space supplier industry, and the space service user support industry, and then argues that the space supplier industry should not be included in the total:
Space supplier industry: sales of goods and services such as satellites or space launches, which make possible the achievement of government space missions or the production of goods and services in space for sale on Earth. Because demand for these goods and services is derived from expenditures on activities in space by governments or satellite operators, we exclude these sales from the total value of the space economy to avoid double counting.
…We argue that summing the four categories to create a total value of the space economy results in some double counting. Government and space service company expenditures on launch services and satellites equal the revenues of the space suppliers who provide those products. Counting both the expenditures on purchases of goods and services and the revenues from sales of those goods and services results in double counting. This difference in accounting is responsible for about $20 billion of the difference between STPI estimates and the SIA estimates for 2016; but only about $8 billion of the difference between STPI’s estimates and the Space Foundation estimates because the Space Foundation also tries to eliminate some of the double counting involved in adding space supplier sales.
I don’t really have a take on the double counting issue, but I’m interested to hear what other people think.
On the issue of what counts as space vs not space — personally, I think that IDA/STPI’s estimate is just a conservative estimate of what counts as the space economy. For example, they leave exclude any money that a satellite TV provider pays for royalties to air a movie or tv show because it’s not directly related to space.
I understand the logic of this, but my own preference would be to include the full expenditures of any firm that requires access to space to operate because I see the firm as a fundamental unit of analysis.
Either way, I love IDA’s report because they are crystal clear about their methodology and premises. I think as with most things, it’s probably best to think of their estimate as being on the conservative end, and other estimates as being on the more inclusive end, and the “real” amount, as much as there can be one, as being somewhere in between.
They also analyze some prominent predictions about the future size of the space economy, although they do not offer any predictions of their own (of course, all of these predictions are before the global coronavirus pandemic):
Interestingly, a lot of Chinese news sources quote Western figures when discussing the space economy, especially Statista (which the IDA report doesn’t cover) as well as Morgan Stanley.
Space Foundation’s figures are popular in market reports. Market research firm iiMedia released a report (link in Chinese) on the Chinese space industry in 2019 and they used Space Foundation’s figures. CIC Consultants also uses Space Foundation’s figures in their 2018 report on the Chinese space sector from 2018 - 2022 (link in Chinese).
Investment bank China International Capital Corporation (CICC) uses Statista’s estimate of 600 billion USD by 2030 in their very thorough report on China’s space sector and who will be China’s SpaceX (link in Chinese).
If you know of independent Chinese estimates of the size of the space economy, please send me a link! I did not come across any myself.
One of the more interesting figures I came across was that Bao Weimin, director of the Science and Technology Committee of CASC, claimed that an Earth-Moon Economic Zone would be worth 10 Trillion USD by 2046 (link in Chinese), although it’s unclear what exactly that’s based on.
If you’re interested in the IDA report, but you’d rather hear more about the findings rather than reading them, Bhavya Lal, one of the authors of the report, gave a great interview on the Planetary Society’s Space Policy Edition podcast.
On July 21, Blaine Curcio moderated a fascinating webinar on the state of the Chinese space sector that has now been put on YouTube:
Representatives from Commsat, Chang Guang Satellite, and Landspace all spoke so it’s definitely worth a watch.
July 13: Dmitry Rogozin, head of Roscosmos, said in an interview that China is “certainly [Russia’s] partner” in space. He also said that Russia was not interested in NASA’s Artemis program to return to the Moon, and stated that Russia was in talks with China to develop a joint lunar base
July 15: Eqypt announced that MisrSat-II, a joint project between Egypt and China, will be launched from China in 2022 after COVID-19 related delays
July 24: CASC successfully launched a Long March 4B rocket from Taiyuan carrying three satellites. The primary payload was the third of the Ziyuan-3 series of satellites, which was developed by a subsidiary of CASC for the Ministry of Natural Resources.
One of the smaller satellites is operated by Hong Kong University and Nanjing University and uses lobster-eye x-ray technology to look for dark matter. The other is for Beijing company Guodian Gaoke’s Apocalypse constellation. Both small satellites were developed by SAST, ultimately a subsidiary of CASC
Until next time
My name is Cory Fitz and I write the China NewSpace newsletter. To make you smarter about China’s rapidly evolving private space industry, China NewSpace brings you translations of Chinese-language articles, as well as a roundup of links and news.
If you have any questions or comments, feel free to contact me at firstname.lastname@example.org
You can also find me on Twitter at @cory_fitz