China’s aerospace information industry is a key focus for the country as it seeks to establish itself as a leader in space technology and gain an edge over its global rivals, particularly the United States. The industry, which combines data captured in space with ground-based big data analytics, has wide-ranging applications in sectors such as transport, energy, communications, and the military.
To further boost the development of the aerospace information industry, a group of companies, research agencies, and space associations in China recently announced the establishment of a joint industrial association. This association aims to support the growth of the industry by nurturing leading private firms and increasing the commercial loan limit for high-quality companies. Additionally, an investment fund cluster of 100 billion yuan (US$14 billion) has been launched to provide financial support to key infrastructure and industrial giants in the industry.
With over 400 companies registered as commercial space firms by the end of 2020, China’s aerospace information industry is expected to reach 44.69 billion yuan (US$6.3 billion) in 2025, up from 29.3 billion yuan in 2021. Globally, the industry holds a significant market share, accounting for 73 percent of the global commercial space market, which was valued at around US$384 billion in 2022.
According to Olivier Contant, the executive director of the International Academy of Astronautics, the size of the aerospace information industry is projected to reach US$1 trillion in the coming years. To achieve this, greater international cooperation and collaboration are crucial. This would support the growth of start-ups and facilitate integration into the industrial ecosystem.
Despite China’s progress in the aerospace information sector, there are challenges that need to be addressed in order to bridge the gap with the United States. One significant obstacle is the lack of private sector support in China. State-owned enterprises dominate the aerospace industry, creating a conflict of interest when it comes to policies that encourage private sector involvement. This limits the innovation and flexibility that private companies can foster.
Furthermore, China’s private aerospace companies face financing challenges. The financing channels available to them are limited, making it difficult for them to secure the necessary funding. This poses a barrier to the commercialization and growth of the industry.
Another hurdle that China must navigate is the escalating tech sanctions imposed by the United States. These sanctions pose a threat to the industry’s ground equipment, which heavily relies on AI chips. Overcoming these challenges and fostering entrepreneurship will be crucial for China to strengthen its aerospace information industry and compete with the United States.
It is clear that China is committed to developing its aerospace information industry and has recognized the importance of private capital and entrepreneurship in driving its growth. With the establishment of the industrial association and the launch of the investment fund cluster, China is taking steps to facilitate the development of the industry and support key players. However, addressing the issues related to private sector support, financing capabilities, and tech sanctions will be essential for China to achieve its goals and establish itself as a global leader in the aerospace information industry.
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