Introduction

The space industry uses rockets to place spacecraft into orbit around the Earth. These spacecraft, such as satellites and crewed space stations, provide services and capabilities in space and back on Earth. There are communications satellites for television, radio broadcasting, and broadband Internet service. Other satellites are used for observing Earth and navigation services.

Space stations, such as the International Space Station (ISS), are used to conduct science experiments in a microgravity environment. Many spacecraft provide capabilities for both civilian and military purposes.

Countries with the most innovative capabilities can project both hard power through the threat of space-based offensive and defensive military technology and soft power through opportunities for collaborative space operations. The space industry also generates “spinoff” technologies that advance other industries such as communications and healthcare.¹

Importance of the space industry and the United States’ role

Annual space launches by superpowers chart from 1957 to 2025 ACCESS FULL INFOGRAPHIC

Two space races define the history of the global space economy: one between the United States and Russia in the second half of the 20th century, and the other between the United States and China today. The first space race began in 1956 when both the United States and Russia announced plans to launch satellites into space. Russia took an early advantage in the race when it launched the Sputnik I satellite in 1957. But Russia lost in the late 1960s when Apollo 11 took National Aeronautics and Space Administration (NASA) astronauts around the moon.²

The United States has been the uncontested leader of the global space economy since the end of that first space race. However, China has surpassed Russia in the number of annual launches, total annual tonnage launched, and number of satellites placed into orbit. In 2025 alone, there were 4,409 satellites launched across all orbits, weighing a total of 3,194 metric tons, on 321 total launches across the entire global space industry.³

Today, the global space industry is on a significant growth trajectory. The space consulting firm Novaspace projects that the industry will expand from US$626.4 billion in 2025 to US$1.01 trillion by 2034.⁴ The primary drivers of this growth are increasing demand for satellite services, higher launch frequency (launch cadence), and the greater carrying capacity of modern rockets.

The global space market features many governments and companies that have satellites they want to deploy, but far fewer launch providers to do so.⁵ The result of this imbalance is a seller’s market in which having the most advanced launch capabilities is a key factor for leadership in the global space economy.

The world's space launch sites map from 2016 to 2026 ACCESS FULL INFOGRAPHIC

Aside from launch capacity, there is also growing global demand for satellite services, especially satellite Internet. Starlink, the world’s leading Low-Earth Orbit (LEO) broadband provider, gained more than 4.6 million new subscribers in 2025.⁶ Plus, there are cutting-edge satellite technologies, including orbital data centers, that are still in the early stages of development.⁷

The United States is the global leader in space innovation because it is the only country with operational reusable rockets, it has the most advanced LEO broadband satellite constellations, and it is the lead partner of the ISS. SpaceX’s Falcon 9 is the most advanced orbital-class reusable rocket and can get payloads into space at a fraction of the cost of traditional, single-use rockets.⁸ Blue Origin’s New Shepard suborbital rocket is also reusable and has flown several suborbital tourism flights.⁹ The United States is also home to two of the most advanced LEO broadband constellations: SpaceX’s Starlink and Amazon’s Leo.¹⁰

Despite lacking several key technologies that maintain America’s advantage, the Chinese Communist Party (CCP) is pouring vast resources into building a commercial space industry it believes will surpass the United States in space capabilities by 2030. The full report analyzes the innovation capacity of Chinese space companies and displays how US complacency could allow China to become the most innovative spacefaring nation.

How innovative is China’s space industry?

Mao Zedong first conceived of China’s space industry in 1958 with his “Two Bombs, One Satellite” program, which set an official goal for China to build an atomic bomb, a hydrogen bomb, and a satellite.¹¹ China’s space industry initially grew quite slowly, only launching a handful of satellites before the turn of the century.¹² However, China joined the ranks of the United States and Russia in 2003 when it successfully launched a crew into orbit, and has since significantly expanded its space industry.¹³

The leading producers of space race materials by countries ACCESS FULL INFOGRAPHIC

The development of China’s space capabilities has primarily been led by state-owned enterprises (SOEs), but in 2014, the CCP invited commercial companies and private investment to participate in the sector for the first time. This change is driving the rapid growth of China’s space sector, which now has more than 500 private companies.³ The CCP’s oversight of all major economic, technical, and academic organizations allows China to leverage the whole of society, rather than just the whole of government or private sector alone, to develop the industry and achieve its space ambitions.¹⁴

In addition to the whole-of-society approach, China’s military, the People’s Liberation Army (PLA), benefits from a policy of military-civil fusion (MCF). Space capabilities are dual-use, meaning they have both military and civilian applications. But, for Chinese space innovation, MCF goes beyond the traditional understanding of a dual-use technology. MCF dictates that the PLA can nationalize commercial technologies and capabilities without the acquisition processes that constrain US military access to commercial space innovation.¹²

Today, China has a robust space industry that is closing the innovation gap with the United States. The large SOEs that remain the foundation of China’s industry have splintered into various private entities. Together, these companies comprise a vertically integrated manufacturing base that continues to scale up production of satellites and rockets. Simultaneously, the CCP spurs growth by creating a regulatory environment that prioritizes the rapid development of space innovation.

China’s annual share of total rocket launches has grown, albeit inconsistently, since its first launch in 1970. However, China’s share declined in 2025, accounting for only 28% of launches.¹⁵ China’s share of all satellites launched annually has remained around 10%, and it accounted for just 8% of all satellites in 2025.¹² These statistics reflect the increasing launch cadence and capacity of other nations, including the United States, as well as emerging space powers such as Europe and India.¹²

While China lacks advanced LEO broadband satellite constellations and fully operational reusable rockets, China does have numerous innovative satellite systems, its own space station, and counter-space military capabilities.

Conclusion

If the United States does not take decisive action soon, China will claim the top spot in the global space economy. China’s demonstrated strengths underscore that the window for the United States to consolidate its lead is narrowing, making regulatory reform and coordinated international engagement at forums such as World Radio Communications Conference in 2027 (WRC 27) not merely prudent but also strategically urgent. If China surpasses the United States in space, American economic competitiveness and national security will suffer.