As China enters the 15th Five-Year Plan (2026-30) period, low-Earth-orbit (LEO) satellites and satellite internet are becoming an increasingly important part of the country’s drive for innovation, industrial upgrading, and high-quality development.
The policy direction is already clear. The plan calls for improving civilian space infrastructure, coordinating development of satellite communications, navigation and remote sensing systems, and accelerating the build-out of LEO satellite internet. The 2026 Government Work Report further stressed the need to speed up satellite internet development and make better use of data resources.
For the Hong Kong Special Administrative Region, this is not just another emerging technology trend but a new strategic opening. The key question is not whether Hong Kong should take part but how it can do so in a way that serves the country’s needs while making the most of its own strengths. On this front, the special administrative region government has sent out encouraging signals. The 2025 Policy Address proposed support for the space economy and a study on streamlining the licensing process for LEO satellites. The 2026-27 Budget went further, stating that LEO satellites can support the development of high-end industries and that Hong Kong can connect the Chinese mainland’s aerospace sector to global markets by providing professional services in research, financing, risk management and law.
These significant signals show that Hong Kong is not on the margins of this emerging sector. Rather, it is well placed to serve as a key link between the mainland’s growing space capabilities and international markets.
What matters now is getting the city’s role right. When LEO satellites are discussed, public attention often turns first to rockets, launch sites, satellite manufacturing and industrial parks. These are important parts of the sector. But they do not define the whole value chain, nor are they necessarily where Hong Kong is best positioned to compete.
In today’s space economy, long-term value lies not only in what is launched into orbit but increasingly in what can be built on the ground from those capabilities. Data services, compliance tools, legal frameworks, insurance products, financial packaging, risk-management solutions and cross-border commercial applications are becoming some of the most valuable parts of the industry. In other words, the real question is no longer simply who can send more satellites into space. It is who can turn space-based capabilities into products and services that markets trust, customers need, and institutions can support.
This is where Hong Kong should focus its efforts. A recent report by the POD Research Institute offers a useful reminder of how the industry is structured. It notes that the estimated total value of the global space economy reached about $613 billion in 2024, while the narrow satellite industry accounted for around $274 billion. Of that total, satellite manufacturing contributed around $16 billion and launch services around $9 billion. By contrast, ground equipment and operations accounted for around $132 billion while satellite services contributed around $117 billion. Another $339 billion came from terrestrial enabled solutions. The figures point to a clear conclusion. In the space economy, especially in the LEO-enabled economy, the larger share of commercial value comes not from upstream hardware alone but from downstream services, applications and institutional conversion.
LEO satellites are not only about what happens in space. They are also about how technological capabilities are translated into rules, trust, contracts, services and markets on the ground. China has already set the direction, and the SAR government has begun to respond. Hong Kong should now take the next step with confidence and a clear sense of purpose
All this matters greatly for Hong Kong. The mainland has already built strong momentum in manufacturing, launch capability, hardware deployment and domestic applications. That is a major national strength, which also means Hong Kong does not need to prove its value by trying to replicate the segments where mainland cities already enjoy scale, industrial depth and infrastructure advantages. An international city does not try to do everything. It focuses on the parts of the value chain where it can build the strongest comparative advantage and become indispensable.
International experience makes the point even clearer. Some economies do not have independent orbital launch capability, yet they have still built strong positions in satellite operations, project financing, legal services, insurance and industry governance. The lesson is simple: Having no rockets does not mean having no role. What matters is whether a city can turn technological capability into mature products and services that customers are willing to buy, financial markets are willing to price and legal systems are willing to support.
Hong Kong is particularly well placed to do exactly that. Its common law system, internationally recognized arbitration services, mature insurance and reinsurance markets, capital-raising capabilities, offshore renminbi business and long-established role as a bridge between the mainland and the broader world are all highly relevant to the next stage of the LEO economy.
Competition will not be decided solely by who can build more satellites. It will also be shaped by who can provide trusted contractual frameworks, support cross-border data flows, manage compliance and liability risks, structure investable projects, and package satellite-enabled services for regional and global markets.
This is precisely where Hong Kong can make a distinct contribution to national development. The city’s most promising role is not as an upstream hardware producer but as a downstream value creator and international service platform. It can help turn satellite capacity and satellite data into tradable services, compliance solutions, contractual frameworks, risk-management tools and high-value cross-border offerings. It can support the development of global connectivity services, positioning and navigation solutions, Earth observation and intelligence applications, internet-of-things services, and specialized offerings for shipping, aviation, logistics, trade, insurance and green finance. Beyond these areas, Hong Kong can also strengthen the surrounding institutional ecosystem. It can provide project financing, listing and capital-market access, arbitration and dispute resolution, space-related insurance, risk-transfer mechanisms, and governance arrangements for cross-border data use. These are not peripheral functions but are some of the most commercially significant and internationally scalable parts of the value chain.
That is why Hong Kong should move with clarity and confidence. First, it should speed up the establishment of a practical framework for LEO satellite data access and governance, covering not only licensing but also data classification, liability allocation, audit requirements, cross-border data flows and standardized interfaces. Second, it should prioritize application scenarios where it already has strong foundations, including maritime monitoring, port logistics, trade compliance, insurance triggers, environmental, social and governance verification and risk early warning. Third, it should make fuller use of its financial strengths by integrating capacity leasing, data services, insurance, risk transfer and investment products into a more coherent satellite-related ecosystem. Fourth, it should position itself as a preferred international platform through which mainland LEO enterprises can standardize contracts, resolve disputes, raise capital, and expand into Asian and Belt and Road Initiative markets. None of this requires Hong Kong to imitate others. What it does require is a clear understanding of where it can add the most value, and the determination to align policy accordingly.
LEO satellites are not only about what happens in space. They are also about how technological capabilities are translated into rules, trust, contracts, services and markets on the ground. China has already set the direction, and the SAR government has begun to respond. Hong Kong should now take the next step with confidence and a clear sense of purpose. The city does not need to compete in areas that do not match its strengths. What it should do is more important: Leverage its institutional advantages, deepen its professional service capabilities and better serve the country’s strategic needs. In doing so, Hong Kong will not simply take part in the LEO economy but help shape one of its most valuable dimensions.
The author is a member of the POD Research Institute and serves on the Yuen Long Area Committee.
The views do not necessarily reflect those of China Daily.
