What Are the Risks of Satellite Overcrowding as China Enters the Low Earth Orbit Market?

Can China’s New ‘Guowang’ Project Competitively Challenge Starlink’s Dominance in Space?

Read Rachel Cheung’s analysis in The Clash of Constellations to understand how China is mobilizing state-owned and private sectors to rival the US in low Earth orbit technology. This report examines the rise of G60 Starlink, the hurdles facing the Guowang project, and the growing global threat of orbital debris and space traffic congestion.

Don’t miss the details on how this new space race impacts global security and telecommunications—read the full summary below to see if China’s strategy can truly disrupt the current US monopoly.

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America leads the space race in low Earth orbit technology, but China is revising its game plan to compete in this realm. China faces many obstacles, including costs, in its quest to become a viable competitor in satellites, yet state-owned enterprises will enjoy a first-mover advantage. In this enlightening report, journalist Rachel Cheung recounts China’s progress in building and running a massive low Earth orbit constellation, along with its implications for the rest of the world.

Take-Aways

• The United States has a commanding lead over China in low Earth orbit technology.
• China’s efforts to compete with America are recent but extensive.
• A proliferation of satellites could become counterproductive.

Summary

The United States has a commanding lead over China in low Earth orbit technology.

The United States substantially outpaces China in the development and deployment of low Earth orbit satellites, as Starlink’s more than 6,000-strong network of satellites attests. Starlink offers rapid internet access to 2.5 million-plus customers in more than 70 countries. Its network of satellites plays a significant role in nations’ national security and strategy. Ukraine’s military, for example, relies on Starlink in its conflict with Russia. Starlink aims to launch another 36,000 satellites over time.

“China needs every satellite it can get as it tries to catch up to Starlink, the network of over 6,000 satellites in low Earth orbit launched by Elon Musk’s SpaceX.”

China is a newcomer to this technological infrastructure; only since 2020 has China made the development of low Earth orbit satellites a priority. To achieve a competitive advantage, the Chinese government created Guowang, an entity that it thought would herald China’s bold foray into the satellite constellation space. But several obstacles have hindered Guowang’s development. China SatNet, the oversight body that reports to the State-owned Assets Supervision and Administration Commission, became embroiled in disciplinary actions, part of China’s enhanced supervision of state-owned enterprises. Chinese leadership had hoped that Guowang’s headquarters would become a new technology center, but that hasn’t happened.

China’s efforts to compete with America are recent but extensive.

In 2023, Shanghai’s municipal government announced the creation of G60 Starlink, run by the Shanghai Spacecom Satellite Technology, part owner of Genesat, a newcomer in the industry. In the culmination of a decade-long process that saw China let private industry compete in the civilian space sector, the Shanghai government retains just part ownership of G60 Starlink. The ascent of SpaceX in the United States impelled Beijing to loosen the reins of state control and give the private sector a freer hand.

“Although G60 Starlink is backed by the Shanghai government, it is only partially state-owned — which observers say represents a significant shift.”

Meanwhile, the Chinese commercial aerospace industry is growing exponentially. Its worth will approach nearly $350 billion by 2025, more than twice its value in 2020. As geopolitical tensions heat up, China will strive to become increasingly self-reliant, in part by not allowing foreign entrants into its market.

A proliferation of satellites could become counterproductive.

Costs to manufacture, deploy, and maintain low Earth orbit satellite networks are steep, and the industry faces thin margins and questionable consumer demand. China’s large state-owned and privately funded firms have yet to place any satellites in orbit.

“Although the profitability of China’s private space industry remains uncertain, what is fairly certain is that China will be adding thousands of satellites to low Earth orbit in the near future.”

Breaking into the global market will be difficult, as China missed the opportunity to procure spectrum rights in the 2010s. Current broadband costs are beyond the reach of many emerging markets, broadband’s potential notwithstanding. China’s aggressive entry into this sector also raises the grim prospect of a surfeit of orbiting satellites. This could fuel a hellish onslaught of space junk causing collisions and rendering the low Earth orbit nonfunctional. No global coordination of space traffic currently exists, and there are no arbiters among spectrum rights owners that could provide processes to prevent overcrowding.

About the Author

Rachel Cheung is a staff writer for The Wire China, based in Hong Kong.