In Beijing on Nov 25, China unveiled an exciting landmark plan to establish itself as a global leader in commercial space by 2027. The proposal outlined sweeping and, given the tight timescale, urgent reforms. The idea is that these will unlock private innovation, facilitate the integration of relevant State resources, and expand international cooperation. The blueprint, released by the China National Space Administration (CNSA), signals an important strategic shift to commercialize the country’s space capabilities while ensuring technological sovereignty and independence, and national security.

The “Action Plan for Promoting the High-Quality and Safe Development of Commercial Space (2025-27)” sets clear objectives and ambitious goals. These include aggressive promotion of a synergistic industrial ecosystem, an imperative for rapidly upscaled production capacity, encouragement of enhanced innovation, and — this is key — streamlined governance. “Commercial space has become a core pillar in building China into a space power,” the CNSA stated, emphasizing the integration of rapidly evolving market dynamics with proactive and sensible government guidance.

The specific key policy initiatives include:

1. Opening national aerospace research-and-development projects to private entities, with a focus on reusable rockets, intelligent satellites, and integrated communication-navigation-remote sensing technologies.

2. Establishing a national commercial space development fund, encouraging “patient capital” through joint investment platforms involving local governments and financial institutions.

3. Mandating shared access to State-owned test facilities, including rocket engine test beds and satellite monitoring stations, to cut private companies’ R&D costs.

4. Unifying technical standards for civil and commercial space activities, covering launch procedures, on-orbit collision avoidance, and data security.

5. Enacting legislation for a national space law at an accelerated pace including clarifying the status and role of commercial space within national space development with a key aim to safeguard the healthy and sustainable development of commercial space activities.

With the Zhuque 3 launch and the 2025-27 plan, China is sending a clear message: It aims to be not just a space power, but a dominant player in the commercial space economy. For international partners and competitors alike, the next few years will be critical in defining the future balance of power beyond Earth’s atmosphere

One of the key technological leaps needed to pursue these aims is the realization of China’s own reusable rocket technologies. These will be similar to those successfully implemented by SpaceX. At the International Astronautical Congress in Sydney, Australia, in October, one of us (Parker) saw such reusable rocket prototype models displayed by Chinese commercial companies.

This bold and exciting plan places heavy emphasis on breakthrough technologies, with such reusable launch vehicles (RLVs) identified as a strategic priority and obvious capacity needed. This came as the Beijing-based LandSpace company prepared for the maiden flight of its Zhuque 3 rocket in early December. This was China’s first operational RLV and the world’s first stainless-steel methalox-fueled rocket.

Modeled after SpaceX’s Falcon IX in cost-efficiency, Zhuque 3 targeted a launch price of under 20,000 yuan ($2,564) per kilogram, matching Falcon IX’s approximately $3,000/kg rate. This event truly marked China’s entry into the reusable rocket era, a game-changer for low-cost access to space, especially for international payloads from developing countries.

Beyond launch vehicles, the plan supports emerging sectors including in-orbit services, space manufacturing, space tourism, and, eventually, lunar resource utilization. It also aims to accelerate deployment of low Earth orbit (LEO) satellite constellations for communication and remote sensing, competing with global players like Starlink and OneWeb but within a system ever more aware of the problems of space debris and the Kessler Syndrome as the recent Shenzhou XX/XXI saga has just demonstrated.

China’s commercial space sector was valued at over $15 billion in 2024, but is poised for exponential growth. This new plan encourages the emergence of a powerful, space-focused industrial ecosystem. It will involve regional specialization, with tech hubs in Beijing, Shanghai, and Hainan focusing on rocket manufacturing, satellite applications, and coastal launch sites respectively. Government procurement policies will play a pivotal role, especially with State agencies required to source commercial launch services, satellites, and data products. “This creates a stable domestic market for private firms while pushing them to meet international standards,” said Li Wei, director of the China Commercial Space Association.

International collaboration is also prioritized. The CNSA also plans to establish a global satellite data sharing platform and simplify export procedures for commercial space technologies, targeting partnerships with Southeast Asian, Middle Eastern, and European nations in particular.

Despite rapid progress, significant hurdles remain as China seeks to follow a path to both global cooperation and leadership. China’s commercial space firms lag behind SpaceX in launch frequency and payload capacity, with Zhuque 3’s 18-metric-ton LEO capacity still below Falcon IX’s 22.8 tons. International regulatory barriers and competition for LEO orbital slots and frequency bandwidth also pose significant challenges. Technical risks persist, too. Reusable rocket technology requires rigorous testing, and China’s private space sector has yet to achieve a successful vertical landing. LandSpace’s Zhuque 3, which aimed for this milestone, experienced a failure during its first landing attempt in December. The 2027 target, though very ambitious, is achievable if past efforts are anything to go by, via sustained policy support and private-sector innovation underpinning it all.

As China ramps up investment, the global space industry is taking note. “China’s commercial space push introduces a new competitive dynamic,” said Lesley Jane Smith, a space policy expert at the International Institute for Strategic Studies. “Its focus on cost reduction and ecosystem integration could disrupt existing market structures.”

With the Zhuque 3 launch and the 2025-27 plan, China is sending a clear message: It aims to be not just a space power, but a dominant player in the commercial space economy. For international partners and competitors alike, the next few years will be critical in defining the future balance of power beyond Earth’s atmosphere.

Meng Su is deputy director of the LSR at the University of Hong Kong, and founder of Origin Space Ltd. Quentin Parker is director of the Laboratory for Space Research (LSR) at the University of Hong Kong.

The views do not necessarily reflect those of China Daily.