This blog post inaugurates a more personal article series, that will give an account of my trips and visits in China (exhibitions, rocket launches, visits…). Do let me know what you think in the comments or by private message.
This weekend marks the closure of the events surrounding the 4th edition of China Space Day, which took place in Changsha from the 22nd to the 26th of April 2019. All in all, 8 forums were going on in parallel, alongside a large commercial space exhibition. These included: the United Nations/China Forum on Space Solutions, a Workshop on Sino-U.S. Space Commercialization, an International Forum on Human Living and Working in Long-term Lunar Habitation, a Symposium on International Governance of Emerging Space Issues under the Rule of Law, and the International Commercial Space Symposium (among others).
I was fortunate to attend the International Commercial Space Symposium, the commercial space exhibition, and the opening ceremony (a big thanks to FutureAerospace for their invitation). In this blog post I would like to share a few thoughts regarding the event and what this shows of Chinese commercial aerospace.
The organization quality of China Space Day overall has been really positive. From my personal experience (commercial space forum), events seemed to have a good flow, both Chinese and international speakers were of high standard, and specific English-speaker personal was dispatched from the organizing team to support foreign guests. Although I only experienced the commercial forum, discussions with fellow attendees of other forums confirmed this impression, some noting the significant improvement over the past edition in Harbin. China Space Day has come a long way, since its first edition in 2016 (see Fig. 1).
Fig. 1 – The posters of the first (left) and current (right) editions of China Space Day
China Commercial Space Symposium
The China Commercial Space Symposium took place during the 23rd and 24th of April, and was hosted for the second time by FutureAerospace, a Chinese space think-tank and VC company. The first day was mostly China-focused (and mandarin-led), with opening keynote speeches from Chinese leaders and space companies in the morning, and thematic sub forums in the afternoon. The following day was dedicated to international commercial space sub forum, and was carried out entirely in English with many international speakers.
China-focused thematic sub forums
Although the whole symposium was worthwhile, the most interesting part of all was undoubtedly the China-focused thematic sub forums. I attended the ones regarding launch vehicles and investors, which consisted in presentations by startup founders and investors, followed by panel discussions. The quality of these events were undeniable, combining C-leveling leaders from Chinese startups (including StarTrek CEO Liang Jianjun, Galactic Energy chairman Liu Baiqi), high-level space VCs (China Growth Capital General Manager Gong Yuan, CDH Investments senior vice president Liu Shang), and moderated by excellent space watchers such as the 36kr Shi Yaqiong and Aerospace China Magazine editor-in-chief Zhang Jingnan.
Fig. 2 – Launch vehicle panel, animated by Zhang Jingnan
One would think that there should have been an uneasy vibe in the room: so many domestic competitors, pitted in the same room to discuss their market strategy and potential, and I initially expected considerable restraint in the speeches. Fortunately this was not the case: many of the CEOs were very willing to discuss their strategy and viewpoint on the market potential in front of their peers, and explaining their technical choices. Here were some of the interesting takeaways:
- Quality of the startup founders: the speakers from the launch vehicle companies gave an excellent impression, showing that each had led in-depth market research and carefully established their business models accordingly. Interestingly, this has led to different technical choices (as summarized here), although with reusability being a consensus among almost all the startups. These multiple technical paths were later on validated by an investor, who claimed that “at the end of the day, it doesn’t matter if you are reusable or not, if you are using methane, kerosene or solid fuel to propel your rocket. My main concern is, what is your business model, and most importantly: how much money per kg of payload?”
- A large market potential: for many space observers, there is a bubble building up within the Chinese NewSpace sector, especially in launch vehicles where 10-15 startups have been founded since late 2014 and are all aiming for the small sat launch market. This view was not shared at all by the launcher startups or investors. The former justified the market pull by future Chinese satellite constellations: over 3000 satellites over the next 5 years, and possibly more when seeing the market trends in the US. One of the startup founders (which will be kept anonymous) claimed that the future Chinese market demand in small sats will be so significant that he considers “insufficient” the number of launcher startups in China. Investors also showed confidence in the market demand, all the while adding that investments in future startups will most likely focus in downstream applications.
- The necessity of going more commercial: “currently 70% of the Chinese market is non-commercial, while only 30% is open to commercial players.”, claimed one investor, joining the overall consensus during the subforum that the Chinese government will have to further open up the space industry to enable commercial space startups to grow and expand. While political hesitations regarding this point were palpable and hampering the sector in 2016 and 2017, the “year 2018 has seen a very clear support of the government towards commercial space, leading to the explosion in investment we have known in 2018”, another investor added.
- There is still VC money out there: to the question “are you planning on putting further capital into the commercial space industry?” asked by 36kr moderator Shi Yaqiong, all the investors on the panel confirmed their willingness to continue to invest, some mentioning a focus on advanced stages, while others made known their interest in more early stage and downstream startups. Unsurprisingly, all investors put forward the importance of the founding team, the technical background, and the business model for future investments. Hu Shaotao from Hubei Changjiang Aerospace Investment also added that the business model consisting in “killing” competitors by unreasonably dragging prices down through investor money, so common in China’s tech sector, is not possible due to the very nature of spacetech, which requires long development cycles and is very dependent on technology. “Nor is it desirable” Hu concluded, taking the example of the death of ex bike-sharing champion Ofo.
Commercial Space Exhibition
Fig. 3 – Entrance of Hunan International Exhibition Center, where the space exhibition was held
Next to the commercial symposium was the China Space Day exhibition, putting forward mostly commercial space startups, but also some booths from SAST, CAST, as well as some space media, CNES, and even the Chinese Great Wall wine manufacturer (which seemed to have made a special edition for the occasion?).
Fig. 4 – an interesting special edition from Great Wall Wine Co.
I spoke to a great number of Chinese startups during the conference, and was impressed by how open they were to discuss projects and strategy. Providing you speak some mandarin, chatting with these NewSpace founders is really fascinating. This most definitely suggests much closer ties in commercial space with international companies in the future!
Fig. 5 – Long March rockets at different scales
China Space Day Opening Ceremony
Final event worth mentioning: the opening ceremony of China Space Day, which took place in presumably what was the biggest (gigantic!) conference room of the Changsha Saint Tropez Hotel on the morning of April 24th. Although sometimes a little too self-congratulatory, the stage production was grandiose, with multiple dances, songs and other performances. Despite clearly insisting on the achievements of Chinese space capabilities with epic-style music in the background, the producers were careful to include parts dedicated to international cooperation, including a speech from Lionel Suchet, Directeur Général Délégué of the French space agency CNES. Also worth noting, a short speech from director of UNOOSA Simonetta Di Pippo, and a brillant drawing contest organized by the Chinese Aerospace Society and Hunan Education Department.
Fig. 6 – Opening ceremony presentators, video extract on Sino-French cooperation, Simonetta Di Pippo being offered one of the drawings, and Yang Liwei signing autographs at the exit after the ceremony
Image credits: Daily Telegraph (Fireworks in Changsha), Andrew Jones (posters of China Space Day). All other pictures are my own.