China is making a strategic push into commercial rocket manufacturing, elevating the sector to a level of national priority previously reserved for semiconductors, as private launch company LandSpace prepares for a listing that could become a watershed moment for the country’s space ambitions.
LandSpace Technology, often dubbed “China’s SpaceX”, had its application for an initial public offering on Shanghai’s STAR Market accepted on Dec. 31, with China International Capital Corp acting as sponsor, according to exchange filings. The move makes LandSpace one of the first pure-play commercial rocket developers to seek a public listing in China.
While investors have focused on the prospect of a rare space-sector IPO, policymakers and industry analysts say the more significant signal lies elsewhere: commercial space is being drawn into China’s long-term industrial and security planning in a way reminiscent of the state’s heavy backing for domestic chipmaking over the past decade.
“From policy language, capital flows and regulatory design, commercial space is now clearly treated as a strategic industry,” said Li Ming, an aerospace policy researcher at a Beijing think tank. “It is moving from a niche innovation sector into the core of national industrial planning.”
The sense of urgency is driven in part by the rapid occupation of low-Earth orbit (LEO), a finite resource increasingly crowded by large satellite constellations.
Industry estimates suggest the safe capacity of LEO is between 60,000 and 100,000 satellites. SpaceX’s Starlink network has already deployed more than 10,000. By contrast, China’s state-backed Guowang (GW) constellation had just over 130 operational satellites in orbit by the end of 2025, according to public data.
That disparity has sharpened Beijing’s focus on building domestic launch capacity capable of deploying satellites at scale, cheaply and quickly — a role increasingly expected of reusable commercial rockets.
“Without reusable launch vehicles and a mature commercial supply chain, China cannot deploy constellations fast enough to compete,” said one industry executive who declined to be named because of the sensitivity of the topic.
Official policy has turned decisively supportive.
In June 2025, the China Securities Regulatory Commission reinstated a special STAR Market listing channel for unprofitable high-tech firms, explicitly naming commercial space alongside artificial intelligence and the “low-altitude economy” as priority sectors.
Both the 2024 and 2025 government work reports called for building commercial space industry clusters, while China’s draft 15th Five-Year Plan in October 2025 elevated “accelerating the development of a space power” to a national strategic objective.
In November, the China National Space Administration released a three-year action plan targeting low-cost, high-reliability, reusable launch vehicles and established a dedicated Commercial Space Division for sector oversight.
LandSpace’s founder, Zhang Changwu, stands out in China’s aerospace world.
Unlike many space entrepreneurs who emerge from state-run research institutes, Zhang began his career in finance. A graduate of Tsinghua University’s School of Economics and Management, he worked in automotive and structured finance at HSBC and Banco Santander before founding LandSpace in 2015, shortly after China formally opened its aerospace sector to private capital.
Zhang applied capital-market discipline — risk control, staged financing and corporate governance — to a sector traditionally dominated by engineers and state planners.
From the outset, LandSpace chose a technically demanding route: liquid-oxygen methane engines and reusable rockets, rather than the simpler solid-fuel or expendable designs adopted by many early Chinese startups.
Methane engines burn cleaner than kerosene, reduce carbon buildup, and are better suited to reusability. They are also harder to develop.
LandSpace’s 80-ton-class “Tianque” (TQ-12) engine passed a full-system test in 2019, making it one of the world’s first high-thrust methane engines to do so. In July 2023, its Zhuque-2 rocket became the first methane-fuelled rocket globally to reach orbit. Later that year it conducted its first commercial satellite launch.
In December 2025, LandSpace flew the Zhuque-3 on its maiden mission, conducting China’s first in-orbit first-stage recovery test. The booster did not achieve a soft landing due to abnormal combustion, but the company said the flight validated re-entry, guidance and structural systems.
Even SpaceX founder Elon Musk took note, writing on social media that Zhuque-3 adopted Starship-like design elements and “could surpass Falcon in five years if all goes well.”
LandSpace has completed more than ten financing rounds, raising over 800 million yuan in its first three years and more than 1.2 billion yuan in a Series C+ round in 2020, according to corporate data provider Qichacha.
Its investors include Sequoia China, Matrix Partners China, Cornerstone Capital, local government funds and, crucially, state industrial capital.
In December 2025, the National Manufacturing Transformation and Upgrading Fund invested 900 million yuan in LandSpace — its largest single investment to date — signalling direct state backing.
“State capital is now the anchor investor in this sector,” said Chen Rui, a venture capitalist specialising in industrial technology. “That changes both the risk profile and the time horizon.”
Across the industry, state-linked funds dominate. By October 2025, 15 provinces had introduced commercial space policies and more than 20 aerospace funds with a combined scale exceeding 480 billion yuan had been established, according to official data.
Yet revenues remain modest and losses heavy.
Blue Arrow Aerospace, another private launch firm, reported revenue of less than 50 million yuan in total from 2022 to mid-2025, while posting cumulative losses approaching 4 billion yuan over the same period, exchange filings show.
The company said it remained loss-making because launch volumes were still low and R&D spending remained high. It plans to raise 7.5 billion yuan in its own IPO, mostly for reusable rocket production and technology.
This mirrors SpaceX’s early history. Founded in 2002, the U.S. company endured years of failures and losses before reaching profitability in 2023, after deploying Starlink at scale and dominating the commercial launch market.
Engineers say China now faces a narrow window to catch up.
Reusable rockets require extreme precision — engines capable of throttling and relighting multiple times, guidance systems accurate to centimetres during hypersonic re-entry, and structures that survive intense heat and stress while remaining lightweight.
Even minor errors can destroy vehicles and wipe out years of work.
But the potential payoff is large. Analysts estimate China’s rocket industry could be worth tens of billions of yuan by 2027, driven primarily by demand for LEO satellite deployment.
Satellites underpin communications in remote regions, maritime connectivity, the Internet of Things and autonomous transport, and have shown strategic value in recent conflicts.
“Launch capacity is the bottleneck,” said Li. “Without it, satellites are just plans on paper.”
Strategic stakes
For Beijing, the stakes go beyond economics.
Control over launch capability and satellite networks is increasingly tied to national security, technological sovereignty and global influence — the same rationale that drove massive investment into domestic semiconductors.
That parallel is not lost on markets. Blue Arrow’s IPO application moved from counselling to acceptance in about five months — faster than many chip firms — underscoring the policy momentum behind the sector.
“Commercial space is becoming part of China’s strategic infrastructure,” Chen said. “The state is not just supporting it — it is betting on it.”
Whether that bet will produce a Chinese equivalent of SpaceX remains uncertain. The technology is still maturing, business models are unproven, and sustained demand depends on the success of satellite constellations that themselves require heavy investment.
But the direction is clear. As low-Earth orbit fills up and the geopolitical value of space grows, China is moving to ensure it has both the rockets and the companies needed to compete — and it is doing so with the same resolve once reserved for chips.
