Is Foreign Capital Really Barred from Investing in China’s Space Companies?

This question has been coming up a lot lately.

Last month, at an OASA event, I shared my perspective on China’s commercial space sector. I noted that LandSpace — now developing a methalox engine for a reusable rocket and participating in an internet-satellite program—has officially entered IPO counseling. Much like the U.S. wave of space SPAC listings around 2021–2022 (many of which dipped post-IPO), hundreds of Chinese space startups founded within the past decade may be approaching the darkest-before-dawn moment.

Compared with U.S. peers, valuations remain compelling. For example, RocketLab (NASDAQ: RKLB) closed on Sept 5, 2025 with a market cap around $22B. By contrast, GalacticEnergy — also focused on small launch vehicles and already with 20 successful launches—appears to be valued around RMB 16–18B.

Policy support is also strengthening. On Aug 25, the Ministry of Industry and Information Technology (MIIT) issued guidance to optimize market access and promote satellite communications, explicitly supporting the accelerated development of LEO satellite internet and direct-to-device (D2D) satellite services. As I mentioned in my talk, policy typically lags industry. New policies follow real progress—so expect broader commercialization in China’s satcom, from broadband internet to direct-to-smartphone.

It’s true: policy constraints make it difficult for foreign capital to invest in China’s leading space firms. But has anyone asked, on behalf of Chinese investors, whether they can invest in top-tier U.S. or European space startups at the early stage? That’s a topic for another day.

Still, three preliminary thoughts:

1. Every country wants its own space industry. China’s commercial space sector offers mature, cost-effective products and deep engineering experience. Investing in domestic/regional startups that can fully leverage these advantages may also mitigate supply-chain risk.

2. Once constellations such as StarNet and Qianfan come online, first movers will exploit these space infrastructures to upgrade local services—and even create new markets. Riding that tailwind could be quite investable.

3. Failing that, when a cohort of Chinese space companies list in Shanghai, Shenzhen, or Hong Kong, aiming to be cornerstone investors pre-IPO could be attractive. Later, institutions familiar with these companies may find ample opportunities in the secondary market.

Chinese institutions find it hard to invest in SpaceX; Chinese space companies can’t partner with SpaceX either. But they do know how to tell their story through the SpaceX lens.

If you’d like to better understand China’s commercial space companies, feel free to reach out.