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The rivalry between the U.S. and China in space is set to intensify in 2025 with the private sector likely to benefit in both countries.
The rivalry between the U.S. and China in space is set to intensify in 2025 as the world’s two largest economies increase rocket launches and satellite constellation construction, analysts say in two new reports published by venture-capital firms.
The private sector in both countries is likely to benefit given the importance of space to their respective ambitions. China aims to become a space superpower by 2045, while the U.S. seeks to maintain its historic lead in the celestial domain. In 2024, Beijing listed commercial spaceflight for the first time as an emerging industry to prioritize in its annual work report, a key central government policy document.
In the fourth quarter of 2024, Chinese space startups “maintained a strong presence in the Top 10 [funding rounds], with notable Series C and D+ rounds raised by Genesat and Landspace,” space investment firm Seraphim said in its report.
From 2009 to the present, the U.S. and China have dominated private-market equity investment in space, Space Capital said in its report. The U.S. accounted for 51% of that investment and China 25%. However, Beijing’s space investment has been growing at a faster pace given its historically low baseline. Some 62% of China’s satellite funding and 47% of its investment in launches have occurred over the past three years.
Space Capital estimates that over the past 15 years, satellites have attracted a whopping 86% of space investment by all countries ($291.2 billion), launches 11% ($38.7 billion) and other emerging industries 3% ($8.8 billion).
“Looking ahead, we expect increasing competition between the U.S. and China for strategic dominance in space,” Seraphim said. The Pentagon’s expanded commercial space program funding “and the appointment of multiple tech leaders in the new U.S. administration” will be important factors in the emerging rivalry.
Seraphim noted the Defense Department is significantly increasing its investment in low-Earth orbit (LEO) satellite services from $900 million to an estimated $13 billion over the next four years, “highlighting the critical role high-speed satellite internet now plays in military operations.”
The Seraphim report emphasized the expected paramount role for Elon Musk-controlled SpaceX in the U.S.’ space investments and strategy. “The company’s near-monopoly in the U.S. launch market, amid competitors struggling to match its pace, may explain why SpaceX is buying back $500 million worth of common shares,” Seraphim said, adding that high-speed satellite internet services like SpaceX’s Starlink are in high demand.
Partially in response to the ascendancy of Starlink, Beijing is constructing three constellations involving more than 10,000 satellites: the Shanghai municipal government-backed G60 Starlink (Thousand Sails), the national-level Guowang and Honghu-3, which is tied to the commercial rocket manufacturer LandSpace.
“Starlink will see increased global competition from the Chinese G60/Thousand Sails constellation,” of which half of the first phase will be launched in 2025, Space Capital said.
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