Your Weekly China Space Industry Summary, by Blaine Curcio and Jean Deville, and with editing by Orbital Gateway Consulting Analyst Aurélie Gillet.

Welcome to the Dongfang Hour China Space Newsletter for 14-20 March 2022. This week, Chinese smallsat deployment companies, talk that China’s answer to Starlink should come “as soon as possible”, but first, the rise of Wuhan’s space industry.

On 16 March, the Wuhan Government published the “Implementation Opinions on Accelerating the Development of the Space Industry in Wuhan” (关于加快推进我市航天产业发展的实施意见). The opinions set development goals for four industries, notably launch vehicles and services, satellite platforms and payloads, space information application services, space ground equipment, by 2025. By that time, the government strives for a ¥100B per year space industry and a leading development area for new industries. 

By 2030, the city hopes to have developed supporting industries such as automated and controllable IT, space industry cloud manufacturing, additive manufacturing, new aerospace materials, and space big data/space smart systems. The local government will make funding available for SMEs to conduct research and development, and will pursue other favorable policies.

The Wuhan space industry is anchored by the Wuhan National Aerospace Industrial Base, which is itself anchored by multiple commercial subsidiaries of CASIC, notably China Rocket and the Xingyun narrowband IoT constellation. These are companies with very long-term development plans, including the deployment of a constellation of many dozen satellites, and rocket production of tens of rockets per year.

Having been launched a handful of years ago, the base and associated projects have taken time to mature, and we are nearing a point where batches of satellites per year will be coming out of CASIC’s Wuhan production line, and where Expace is launching tens of rockets per year. An industrial base worth ¥100B per year (~US$15B) is no small feat, but with significant financial and regulatory support from the government, industrial support from CASIC, and the right incentive structure, it just might work.

CALT subsidiary China Rocket announced official operation of its Shandong manufacturing facility. The location on the coast of Shandong puts final assembly and testing close to the Haiyang launch base, reducing lead time (prior to this, final assembly tests were done in Beijing).

These facilities represent Phase 1 of the Shandong manufacturing facilities. China Rocket is now reportedly working on Phase 2, which will increase manufacturing output to 20 rockets/year.

A Long March-4C launched the Yaogan-34 02 satellite on 17 March at just past 3pm local time. We have now seen ~53 Yaogan satellites launched since the beginning of 2017, with 24 launched in 2021 alone. The satellite and rocket were both developed by SAST, with the Shanghai subsidiary of CASC exhibiting its impressive variety of expertise. The satellite is expected to carry out reconnaissance missions, with an apparent focus on the Belt and Road regions as noted by SAST. 

In an interesting example of the broadening applicability of launch technology, OneSpace announced two solid rocket engines aimed at non-launch customers. The company’s Hongming-220 solid rocket booster is optimized for UAVs, while the Hongming-301 is designed for rocket sled applications. The company also provided some additional details on its HQ building, which involved a total investment of ¥260M.

Galactic Energy signed a strategic cooperation agreement with satellite dispenser manufacturer Weifen Technology. In December 2021, Galactic Energy  became the first commercial launch company in China other than Expace (a nominally commercial CASIC subsidiary) to complete two successful launches, when it launched multiple satellites on its Ceres-1. The company signed an agreement with CASIC commercial subsidiary Huateng in May 2021 for international market development. This news comes just a couple of weeks after the deployment of a test cubesat for Xuanming Xingyuan by satellite dispenser company COSATS. 

Finally, the CASC 6th Academy, cooperating with the 11th Academy (Xi’an Aerospace Propulsion Institute) performed a 520-second test fire of its high-thrust YF-77 liquid hydrolox engine, which is currently used on the LM-5 first stage.

NASA’s Mars Reconnaissance Orbiter (MRO) captured stunning images of Zhurong on March 11 2022, revealing also that the rover had traveled a distance of roughly 1.5 km (note: this is helpful because the last update from China dates back to late 2021). The picture was taken by HiRISE instrument on MRO.

CASC and Chongqing University signed a strategic cooperation agreement with several vague but not insignificant plans including cooperation in developing talents, sharing resources, international exchange and cooperation, and developing indigenous aerospace technology.

Notably, the signing was attended by Wu Yansheng, Chairman and Party Secretary of CASC, and by Zhang Zongyi, President of Chongqing University. The attendance of two such high-ranking representatives is likely an indication of high-level support.

In the latest development in China’s throwing its hat into the LEO broadband constellations ring, last week’s Two Sessions saw a senior Chinese official call for a Chinese version of ‘Starlink’ as soon as possible. The statements came from Zhang Tao, a member of the Chinese People’s Political Consultative Conference (one of the Two Sessions), and Professor at Beihang University, China’s top aerospace university. Zhang boldly stated that 

A statement from Zhang does not lead to any direct action, it shows high-level support, interest, and a certain degree of urgency, for an accelerated response to Starlink (and LEO broadband more generally). We expect to see more batches of LEO broadband satellites launched by China over the coming year or two, with 2022 having already seen 6 satellites launched by Galaxy Space with a total throughput of 240 Gbps.

Separately, FireEye Positioning (火眼位置) announced an A+ round of funding of some “tens of millions of RMB”, with funding expected to go towards R&D in the field of high-precision positioning technology. The company launched the Tianshu-1 in October 2021 in cooperation with Spacety, with the LEO satellite aiming to provide enhanced navigation services for autonomous driving, precision agriculture, and other verticals.

Further up the supply chain, the Chengdu Heavy Industry Fund established an “High-End Aero/Space Equipment Industry Sub-Fund”. The Southwestern Chinese city and its relative neighbor Chongqing combine to form a center for electronic and communications engineering, with the two cities having seen significant investment from both major SOEs (CETC, CASC/CAST, and most recently China SatNet) and commercial companies (Commsat, OneSpace). The fund has a reported ¥3 billion to invest in innovative companies.

China Telecom announced that the company has exceeded 110,000 users for its Tiantong satellite phone services. The satellite phone incorporates Chinese-manufactured chips and terminal equipment, and is serving primarily civil government and enterprise customers. The system now covers the Middle East, Central Asia, Southeast Asia, and the Pacific and Indian Oceans. 

Shanghai-based Spring Airlines trialed in-flight VR on a flight from Shanghai to Baishan, Jilin Province. In-flight connectivity is comparatively undeveloped in China due in part to limited satellite capacity, and in part to relatively slow-evolving regulations, but this is beginning to change as satellite internet and mobile connectivity are becoming higher-priority.

While in-flight VR is still many years away from mass adoption (and perhaps never), the trials indicate, among other things the relative openness to experimentation of commercial airlines compared to state-owned ones. Another such example is commercially-owned Qingdao Airlines, which debuted IFC using ChinaSat-16 back in 2020. 

The Wenchang Municipal Government signed an agreement with the Xichang Satellite Launch Center to jointly develop space cultural and tourism activities at the Wenchang Space Launch Center*. The agreement is but the latest example of space tourism activities around Wenchang, the launch site in tropical Hainan island, a sort of “Chinese version of Hawaii”. The launch site has attracted pilgrimages for many launches, in particular of the Long March-5 and 5B.  

The Harbin Institute of Technology (HIT) was selected as the first national science education base for the period 2021-2025. The designation, given by the MIIT, will make the university a center for space tourism and space culture. HIT is one of China’s premier aerospace universities, and is a major component of the economy of Harbin, a very large city in China’s Northeastern region, the nation’s “rust belt”. 

CASIC signed a strategic cooperation agreement with Yichang City, Hubei Province. Yichang is the third-largest city in Hubei after Wuhan and Xiangyang, and is somewhat more than halfway from Chongqing to Wuhan. The agreement appears to be early-stage and still vague, with plans for “industrial cooperation”. Conceivably, industrial activity in Yichang will be for some supporting industry to CASIC’s larger space activities in Wuhan. 

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