Space Programme

Elon Musk’s new rival

Chinese company wants to muscle in on space tourism


We have lift off: ChinaRocket has big commercial ambitions

One of the major themes in international travel over the past decade has been the growing number of Chinese tourists travelling abroad – and spending large sums in cities as far apart as Sydney, Seoul and San Franscisco. Since June’s Brexit vote the UK has been a particular beneficiary of such spending, with Chinese visitors flocking to London to take advantage of a weak pound. The Guardian reports, for instance, that Westfield’s west London mall saw spending by Chinese visitors rise 53% in August over the same month in 2015. “We anticipate the September and October Chinese tourist spend to follow August’s surge,” noted tax-free shopping company Global Blue.

As WiC readers know, retail therapy is a key part of many Chinese holidaymakers’ itineraries. But a new firm is betting the country’s bolder tourists will tire of shopping for Louis Vuitton and opt for something more adventurous. In fact, the plan is extremely ambitious: it wants to offer them the chance to orbit the earth in its spaceships.

In mid-October state-owned China Aerospace Science and Technology Corp created a new company that plans to launch space tourism within a decade. The new venture, ChinaRocket, has been described as the country’s answer to the billionaire-led troika of Elon Musk’s SpaceX, Jeff Bezos’ Blue Origin and Richard Branson’s Virgin Galactica. And in an interview with National Business Daily, ChinaRocket’s president Han Qingping readily acknowledged the Western companies’ role in prompting the government to push China’s space programme onto a more commercial footing. “In the past, the Chinese space industry was under the state-planned economy and its managers were not wholly familiar with the market,” Han said.

ChinaRocket wants to introduce private sector investment and skills, creating Space+, the cosmic equivalent of internet+ (one of China’s favourite buzzwords for the merger of traditional industries with the technology of the internet). Han professes a clear desire to forge ties with tech giants such as Alibaba and Tencent (the latter may be a good bet given its boss Pony Ma once said his childhood dream was to become an astronomer).

Indeed, Han believes the sheer scale of China’s available capital gives ChinaRocket a big advantage over SpaceX, which is currently valued around the $15 billion mark. He also tells NBD that ChinaRocket’s core satellite and rocket launch business is already profitable and that he believes the range of rockets it has under development is wider than at SpaceX or Blue Origin.

“SpaceX’s recent accident has made people question its reliability whereas ours is globally recognised,” he said, in reference to the explosion of a SpaceX rocket on its Cape Canaveral launch pad on September 1. Strangely, Han doesn’t mention what happened the very next day: the suspected explosion of a Gaofen satellite shortly after its launch by one of his parent company’s Long March 4C rockets. The Chinese government hushed up the incident, much to the annoyance of netizens with an interest in space exploration. “We can accept success and withstand failure,” one complained.

A second and perhaps more important reason for ChinaRocket’s spin-off is its new “arms length” relationship with the state. The Chinese aerospace industry has long been viewed with suspicion by Western governments, which highlight its close relationship with the military. In 2011, NASA was banned from working with it following accusations of data and technology theft. Yet as we wrote in WiC343, China continues to pursue its dreams of becoming a space superpower and recently completed a 30-day manned mission to its Tiangong-2 space lab. In 2020, it plans to send a probe to Mars.

The key to unlocking greater profits in space for both ChinaRocket and its Western competitors lies in reducing rocket launch costs by making more of the equipment reusable. Indeed, this is the main reason why Elon Musk set up SpaceX in 2002, after discovering that the launch costs were one of the most expensive aspects of getting to Mars. Musk’s ambitions extend far beyond putting a probe on the red planet. He wants to sustain a community there and at the end of September he reaffirmed his intention to establish a one million-strong city on Mars within a 100 years.

There are two American companies on their way to making reusable rockets a reality. Blue Origin first successfully landed a rocket in November 2015, followed by SpaceX a month later. Earlier this month, Blue Origin’s new Shepard rocket not only made its fifth successful launch and landing, but also split off the rocket’s escape capsule for the first time. This is designed to save the crew in the event of a failed launch (the rocket itself is named after John Shepard, the first man to achieve suborbital flight in 1961).

As a result, Jeff Bezos has announced plans to send the first paying customers into space orbit in 2018.

Han tells NBD that ChinaRocket will have a similar prototype ready by 2019 and could have paying customers in the air a couple of years later. (WiC hopes that Han’s targets prove more realistic than those for the commercial launch of China’s homegrown passenger jet, the C919, which has become a byword for missed deadlines and delays.)

ChinaRocket has unveiled two concept design models. The first is a 10-tonne space plane with a six-metre wingspan. It can carry five people to an altitude of 100 kilometres at Mach 6. At this height, passengers will reach the cusp of outer space, and be able to see both the curvature of the earth and the blackness of space, while experiencing two minutes of weightlessness.

In its promotional video, the company shows a mother and daughter sitting on what looks like a conventional airplane until the child’s teddy bear suddenly floats off down the aisle.

ChinaRocket’s second model is a larger 100-tonne space craft with a 12-metre wingspan, which will fly to an altitude of 130 kilometres and reach Mach 8 speed. This will enable tourists to experience four minutes of weightlessness.

Han says the cost per person to travel will be similar to the $200,000 touted by SpaceX and Blue Origin, but he believes that fees will come down rapidly as rockets become more reusable. Analysts say SpaceX currently charges about $62 million to launch conventional satellites from its rockets for its corporate customers and about $20 million more for the space missions that it undertakes for NASA.

Han claims ChinaRocket will eventually launch 50 rockets per year and based on the money SpaceX makes, this would give him annual revenues around the $3 billion mark. However, he also says the company aims to charge about 30% less than competitors after achieving economies of scale and technological standardisation.

Alongside space tourism, ChinaRocket is developing a range of models to fulfill commercial contracts. It has a light carrier rocket called Naga-1 under development, which is scheduled for its first launch in 2017. This will be able to carry loads of up to 1,600kg on a 400-kilometre low earth orbit.

It is also busy developing a Long March 8 Rocket, part of a family of Long March heavy lifting rockets. This model is said to be suitable for lifting loads of about 3.5 tonnes, about the weight of many satellites, into a sun-synchronous orbit.

Xinhua calculates the commercial space industry will be worth about $30 billion a year by 2020, when Han says he hopes to see ChinaRocket listed on the Shanghai Stock Exchange. All of these plans sound very confident and Han is convinced that he will soon blast past SpaceX into outer space. “Achieving the same valuation as SpaceX is just our near term goal,” he concludes. “Over the longer term we will be a much larger company.”

SpaceX founder Elon Musk has other ideas. When asked why his own company has never filed patents, he told the Smithsonian’s Air&Space magazine, “We try not to provide a recipe by which China can copy us and we find our inventions coming right back at us.”

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.