Commercial aerospace industry: A new quality productive force in China’s economic growth

People watching the launch of Tianwen-1 Mars probe at Hainan Wenchang Satellite Launch Center, July 23, 2020. /CFP

People watching the launch of Tianwen-1 Mars probe at Hainan Wenchang Satellite Launch Center, July 23, 2020. /CFP

Editor’s note: Li Rui is a partner at Shunwei Capital. The article reflects the author’s opinions and not necessarily those of CGTN.

Aerospace has consistently been a strategically advantageous industry for China. State-owned enterprises and research institutions such as China Aerospace Science and Technology Corporation, China Aerospace Science and Industry Corporation, and the Chinese Academy of Sciences  are central to the development of manned spaceflight, carrier rockets, satellites, and space stations. The advent of low Earth orbit (LEO) satellite internet has not only significantly influenced the lives of humans and production of society, but also set forth demands for cost reduction and efficiency enhancement within China’s space industry chain.

Satellite internet, as an essential supplementary communication method, stands as the core infrastructure for the upcoming 6G communications. It has been extensively employed as the primary emergency communication technology in maritime and disaster relief scenarios. In the realm of consumer electronics, models such as Xiaomi 14 Ultra and Huawei Mate 60 Pro are leaders in direct satellite-to-phone connectivity globally. The have ignited a worldwide upsurge in satellite phone usage. In the automotive sector, satellite internet is anticipated to serve as a critical supplementary technology for autonomous driving and emergency alerts. In home communication scenarios, high-speed and low-latency internet access is expected to be extended to highly remote areas. We foresee that the satellite internet era will generate a plethora of new demands, scenarios, and business models.

LEO satellite model on display in Shanghai, China, April 20, 2021. /CFP

LEO satellite model on display in Shanghai, China, April 20, 2021. /CFP

Given the substantial number of satellites required for LEO satellite internet, state-owned enterprises and research institutions will be the main drivers of the development of the industry chain. However, private enterprises have also exerted a significant catalytic effect and played a crucial role in driving cost reductions and efficiency improvement. Whether as component suppliers, technical service providers, or complete system suppliers, private enterprises can operate with corporate management practices that effectively motivate talent and achieve more efficient management. Moreover, they can integrate mature production, operational capabilities and management experience from industries such as consumer electronics and automotive into the aerospace sector.

Large-scale construction of satellite internet requires the participation of enterprises and research institutions to vocational units across the entire industrial chain, including in satellite platforms, payloads and launches, ground network equipment and consumer devices. This industry cluster is poised to play a significant role in driving employment and economic growth, as well as in providing communication service infrastructure to Belt and Road participating countries. The growth of China’s commercial aerospace industry will inject new vitality into high-quality economic development and propel national scientific progress and industrial upgrading.