APOGEE STAFF
The rise of the People’s Republic of China (PRC) as a space power has sparked a culture change for militaries in the United States and allied nations, a double-time march to field new and better capabilities so they can maintain their historic advantage in the domain. Twenty-four major steps to reshape the U.S. Air Force and U.S. Space Force were announced in February 2024, with an urgent warning from the services’ civilian leader Frank Kendall: “We are out of time to reoptimize our forces to meet the strategic challenges in a time of Great Power Competition.”
The trend line may seem to favor the PRC. It has grown the number of its commercial space companies from a dozen in 2015 to more than 300 today, launched payloads at such a pace that it now operates half the world’s surveillance satellites, and pioneered development of promising subatomic quantum links between space and Earth. Still, as it shifts resources toward catching up in space, the PRC faces challenges to its progress that are rooted in the most fundamental of its government policies and societal structures.
One-party central control tends to stifle the innovation that fuels technological advancement in space. At a time when other spacefaring nations are sharing information and inviting a diversity of ideas from new players, the PRC is discouraging women from stepping out of traditional homemaker roles, restricting opportunities for minority populations, and tightening the circle of decision-makers within the ruling Chinese Communist Party (CCP). This insular approach hampers efforts by the PRC to recruit the most promising technology researchers, even among its own global diaspora, and forestalls the benefits of partnerships with other leading spacefaring nations. A decade-long effort to expand its relationships overseas has been hampered by rejection of the CCP’s authoritarian philosophy of governance, according to a 2023 report to Congress by the U.S.-China Economic and Security Review Commission (USCC). This includes unquestioned party rule over the nation, the stifling of criticism regarding party policies, the party’s unequivocal claim to speak for Chinese people worldwide, and its threat to go to war to annex self-governed Taiwan with the mainland.
The PRC has made progress in space by following the lead of the U.S. and its allies in encouraging the development of a robust space commerce sector. During the PRC’s historic opening to the West in the 1970s, the nation tried to insert a competitive marketplace into its Marxist-style economy to foster innovation and efficiency. During the past decade, the PRC has accelerated this approach with space commerce, beginning with the publication in 2015 of the blueprint, “Medium and Long-Term Development Plan for National Civilian Space Infrastructure.” But it’s unclear today whether the PRC can sustain a competitive marketplace, with the benefits of risk and reward that accompany it.
One of the things you lose when you have these corporations that are very closely aligned with the government is they have less ability to be innovative, agile, adapt to new environments.”
– Bruce McClintock, Space Enterprise Initiative at Rand Corp.
State-owned enterprises (SOE), state partnerships and state funding still dominate the business of space in the PRC. The central government, in large part, is creating the demand for space commerce, said U.S. Space Force Maj. Gen. Gregory J. Gagnon, deputy chief of space operations for intelligence. “What we find is that command-driven economies tend to make poor decisions over time, whereas capitalist economies tend to have the ‘destructive creationism’ of capitalism, which gets rid of losers and rewards winners,” Gagnon said during an October 2023 interview with the D.C.-based policy research group the Center for Strategic and International Studies (CSIS). Gagnon noted that the Chinese state is backing a planned system of as many as 13,000 internet satellites, mimicking the Starlink network developed by U.S.-based SpaceX. He compared the effort to the massive, failed state investments in property that have helped drag down the PRC economy. “They’ve built beautiful cities and high-rises,” Gagnon said, “and have nobody to live in them.”
In true market-based economies, proposals from space commerce must survive the crucible of vetting from private investors, Bruce McClintock, lead of the Space Enterprise Initiative at the Rand Corp. research group, told Apogee in April 2023. “One of the things you lose when you have these corporations that are very closely aligned with the government is they have less ability to be innovative, agile, adapt to new environments,” McClintock said. “These are some of the strengths of the western system of capitalism and commerce; our companies are free to pursue their own paths if they can find investment.”
Even as the PRC tries to stimulate space and technology markets, it imposes new restrictions to enforce its state-centered philosophy. Institutions such as the People’s Bank of China (PBOC) and the Cyberspace Administration of China closely monitor and review the function and business practices of prominent tech firms, the USCC report said. One example: Ant Group, owner of the world’s largest mobile payment platform, was forced to reorganize, subjected to new capital requirements, placed under control of the PBOC, and fined — in one case, $982 million — for what the bank called violations of corporate governance and financial consumer protection laws. “In this chilled environment,” the USCC report said, “other prominent tech firms continue to lag.” The PRC has reversed an approach that fueled industrial growth under an earlier regime, author and Johns Hopkins University professor Yuen Yuen Ang wrote in Foreign Affairs magazine during 2018. “Beijing became a director, not a dictator,” Ang said. “Instead of trying to command their way to rapid industrialization and growth, reformers focused on creating the right conditions for lower-level officials to kick-start development in their own communities using local resources.”
Close ties in the PRC between space commerce and the SOEs appear to extend even to new startups, said Brian Hart, a fellow with the China Power Project at CSIS. “I think it’s a little bit harder for them to sort of shake loose from that,” Hart said — to shake institutions such as the China Aerospace Science and Technology Corp., the China Aerospace Science and Industry Corp., and the China Academy of Launch Vehicle Technology. These groups can take credit for the PRC’s many achievements in space so far, he said, but reaching the reliability of a SpaceX with its reusable rocket fleet is another matter. “I think getting to the next stage, something that’s the equivalent of a Falcon 9, is harder in the commercial sector, so I think it’s still the SOEs that are driving that,” he said. “I think the U.S. has some big advantages right now — again, SpaceX and other entrants into the field. I do think that we have a big head start.”
One example of the challenges the PRC faces retrofitting its economy for a competitive market is so-called government guidance funds — investment vehicles that combine state and nonstate capital to boost startups in strategic sectors such as space. As of July 2023, more than 2,100 government guidance funds had raised $897 billion, but two-thirds failed to make a single investment, the USCC report said. Most guidance funds “fail to live up to their ambitions, weakened by unrealistic goals, bureaucratic constraints, incompetent management, risk aversion, and a lack of market discipline,” said a study quoted in the USCC report, from the Center for Security and Emerging Technology at Georgetown University’s Walsh School of Foreign Service.
Even in market-driven economies, government has played a vital role in the historic development of space capabilities. The first U.S. space rockets were military rockets, built in the U.S. by the Air Force and Navy from technology pioneered by German scientists during World War II. The civil space agency NASA spearheaded manned lunar missions. And for modern commercial space leaders such as SpaceX and Rocket Lab, government missions have accounted for a large share of their early work, notes an analysis of commercial space authored by scholars in the PRC and published in October 2023 in the science journal Nature. The analysis, based on a survey of Chinese space interests, found that many of them see parallels between commercial space in the PRC and the West: “The function of government is emphasized in both definitions, cementing the role of government on commercial space endeavor.” But those interviewed also saw a divergence in execution, with some acknowledging that a host of government actions in the U.S. has succeeded in “creating an equal and competitive environment” in which “a number of commercial launch service providers emerged, providing launch services at amazingly low prices.”
The fits and starts with PRC space commerce, said Rand’s McClintock, mirror in some ways the experience of Russia — another authoritarian regime and the only global space power working with the PRC. After the Soviet Union was dissolved in 1991, Russia tried to cling to its status as the nation that orbited the first satellite, launched the first man and woman into space, and fostered creation of a Chinese space program. Instead, the Russian program declined in the face of a crumbling economy. “In general, Russian firms used joint ventures to gain market share without truly privatizing their companies,” McClintock said in his 2017 report “The Russian Space Sector.”
“While not apparent to the West twenty-five years ago, it now seems clear that the Russian government never intended to privatize their industry in the same way the West did.” In addition to funding declines, the Russian space sector suffered from corruption — a concern that appears to be a factor in decision-making for the Chinese space sector today. “Sadly, following twenty-five years of opportunity,” McClintock wrote, “Russia space is a poster child for how not to evolve for the next century of space challenges.”
In August 2023, Xi Jinping, general secretary of the CCP, abruptly replaced two top generals in the Rocket Force missile command, suggesting suspicions of graft or misconduct, The New York Times reported. After he came to power in 2012, Xi targeted corruption in the military by ordering a sweeping purge and reorganization. The change at Rocket Force two decades later signals a continuing concern, the Times reported, “that China’s officials can be kept from straying only with intense scrutiny and pressure from above.” They are subject to dismissal and arrest, to constant inspections by CCP investigators, and to campaigns pushing loyalty to the party and to Xi. The party chairman is called the nation’s outright “leader” in CCP journals and Chinese media, reminiscent of the cult of personality that surrounded founding chairman Mao Zedong, according to a 2018 report in the quarterly China Leadership Monitor, based at Claremont McKenna College in California. Xi has solidified his power as the military’s “final decision-making authority,” and a military circular warned, “the army should follow Xi’s command, answer to his order, and never worry him.”
Xi has used his growing power to strengthen the military and ratchet up an emphasis on security, including a national policy of fusing military and civil development (MCF) that makes leading spacefaring nations reluctant to cooperate with the PRC. Some have joined the United States in restricting PRC access to advanced technologies for fear they’ll wind up boosting PRC military capabilities. These moves undermine the PRC’s ability to solve complex domestic problems “and will impede achieving the CCP’s goal of becoming a major power on the world stage,” according to the Annual Threat Assessment from the U.S. Intelligence Community, published in February 2024. An October 2023 report in Foreign Affairs said, “China’s flexing of its new military capabilities has motivated some actors in the region to find ways to hedge or even push back against the country’s more assertive military posture. There can be no doubt that Chinese actions have created a strategic rationale for the United States and its partners to work together in new ways that Beijing finds extremely worrisome.”
Adding to the tension is espionage aimed at targets including U.S. technology. “We probably have somewhere in the order of 2,000 active investigations that are just related to the Chinese government’s effort to steal information,” FBI Director Christopher Wray told CBS News in October 2023. Said Hart with CSIS, “Even the Russians have been angry about what China has done on that front in the past.” Hart noted that U.S. concerns led to an act of Congress, the Wolf Amendment, prohibiting NASA from cooperation with the PRC and PRC-owned companies without certification from the FBI. Sweden also severed ties with the People’s Liberation Army (PLA) at satellite ground stations in Australia, Chile and Sweden over concerns about possible military use. The PLA operates a ground station in Argentina whose stated mission of peaceful research has come under question, and under Xi’s MCF policy, has achieved prominence in domestic space programs. “I think that shows me that this isn’t just the United States that’s worried about it,” Hart said. “There’s other countries that are essentially trying to limit their exposure to China.”
China’s flexing of its new military capabilities has motivated some actors in the region to find ways to hedge or even push back against the country’s more assertive military posture. There can be no doubt that Chinese actions have created a strategic rationale for the United States and its partners to work together in new ways that Beijing finds extremely worrisome.”
– Foreign Affairs October 2023 report
The PRC does business in space with a number of nations, in part by trying to sell satellite communication and observation services through its One Belt, One Road global infrastructure policy, John Huth, defense intelligence officer for space and counterspace with the Defense Intelligence Agency, told Defense One in June 2023. “So, they have had some successes with other countries in pulling them in, if you will, and in some cases, providing some upfront investment,” Huth said. “We’ll see over time how well those investments pan out for those countries.” Whether the PRC, for its part, sees any technological return from international deals remains to be seen. The nation has signed up some half-dozen countries for its planned International Lunar Research Station, but among them, only Russia is a major player in space. “I’m not entirely certain [the partnerships] will have a lot of technical things to add,” Victoria Samson, chief director of space security and stability for the nonprofit Secure World Foundation, told SpaceNews. By comparison, more than 40 nations have joined the U.S.-led lunar and Mars landing initiative known as Artemis, with the European Space Agency contributing key components and India a recent signee. The world’s top space powers, according to a July 2023 report in the online publication Space Review, are the United States, Russia, China, Europe, India and Japan. In ranking the powers, the report measured orbital launches, deep space launches, scientific achievements and military capabilities. “The landscape began to shift in 2018,” the report said. “Though China continues to increase its space power, the resurgence of the U.S. in space activities and the entrance of India exerted a downward pressure on China’s relative share of space power. This led to a noticeable plateau in China’s once meteoric rise.”
PRC policies oppressing minority populations and steering women toward roles as homemakers also shut off potential paths to technological progress. In other nations, women are attaining leadership roles in civil, commercial and military space. Among the examples: The first director of Australia’s Defence Command, Air Vice-Marshal Cath Roberts, took charge of creating her nation’s Defence Space Strategy before handing over the command in December 2023. The United Nations Office for Outer Space Affairs works to bring more women into space science, technology, innovation and exploration through its Space4Women program. In the United States, the White House’s National Space Council, guiding all space policy and strategy, is chaired by Vice President Kamala Harris. For the PRC, the contrast came into focus in October 2023 during the National Women’s Congress, where Xi urged women to get married and have babies, The New York Times reported. He called this essential for “China’s path to modernization.” It’s a departure from a decade ago, analysts told the Times, when top officials attending the congress — held every five years — stressed gender equality and women’s self-realization. What’s more, in a break from two decades of tradition, no women serve in the CCP Politburo, the party’s second-most powerful group and its executive policymaking body. Meantime, some minority populations suffer marginalization in the PRC. Fifty-one members of the United Nations led by the United Kingdom issued a joint declaration in October 2023 condemning the PRC’s treatment of the ethnic Uyghur people and other Muslim minorities in the northwest territory of Xinjiang. The move followed a 19-17 vote by the U.N. Human Rights Council rejecting debate on the issue. Eleven nations abstained from the vote. Earlier, the U.N. High Commissioner for Human Rights issued recommendations to the PRC after investigating decades of allegations about systematic abduction and abuse in Xinjiang. One recommendation is that the PRC “takes prompt steps to release all individuals arbitrarily deprived of their liberty.”
The PRC also falls short in retaining the talent that can advance its goals of technological achievement, the USCC report said. Despite financial initiatives such as the Thousand Talents program and transnational organizations appealing to national pride, the PRC is still only attracting second-tier researchers. The problems start early in the education system, where “creative thinking skills key to technological breakthroughs are seen by the Party as a threat to ideological rigor,” the report said. Later, the brightest students often travel overseas to get the best education and are reluctant to return home. “Many of China’s most internationally cited professors and researchers hold degrees from foreign institutions,” the report said, adding that researchers who do return home are generally less accomplished and unlikely to have held a faculty appointment outside the PRC.
One recent U.S. accomplishment in space is the record-breaking launch of a military payload in September 2023 after just 24 hours’ notice, carried out for Space Force by Texas-based Firefly Aerospace. Former Firefly CEO Bill Weber quoted company advisor and former NASA Administrator Jim Bridenstine in describing how the launch, called Victus Nox, represents the contrast between the U.S. and adversaries such as the PRC and Russia: “We will never out-centrally manage governments around the world that have total control of their people.” Weber told Apogee. “That’s not the United States. It never will be. But what we will do, and what we are the admiration of the world for, and what is our advantage, is to out-innovate them. If given a challenge, how free enterprise and freedom in the United States manifests itself is rapid innovation. We can figure things out in a way that no other nation in the world can.”