Hangzhou lends its name to this ambitious endeavor.

The Qiantang River, after which the region is named, serves as both the current administrative moniker for Hangzhou and a timeless geographical and historical emblem of the city.

Although the YuanXingZhe-1 rocket has yet to complete its inaugural orbital validation, construction of the Qiantang base has already commenced. With a total investment of RMB 5.2 billion, the base is poised to produce 25 rockets annually, integrating production, assembly, testing, inspection, and recovery and reuse processes within a single facility.

Even before a single rocket has taken flight, preparations are already underway for its next ten launches. Hangzhou offers Arrow Yuan more than just a manufacturing base; it prematurely accommodates the company's long-term vision for launch capacity.

Such industrial investments are not novel in China.

In 2008, amid the global financial crisis, the LCD panel industry witnessed a rapid decline. Hefei stepped in, investing in the construction of BOE's 6th-generation LCD panel production line. This project later became a pivotal launchpad for Hefei's burgeoning display industry.

Local governments often excel at investing in the future of nascent industries, though rockets present a harsher reality than panels.

While panels allow for yield improvements and inventory buffers, rockets lack such transitional phases. Until the first successful orbit insertion, all production capacity, orders, and valuations hinge on a singular outcome.

On September 16, Arrow Yuan Technology announced the completion of its B++ round of financing, with total B-series funding over the past six months exceeding RMB 2.3 billion. IDG Capital, Hundun Investment, Hangzhou Capital, Songyuan Venture Capital, and others co-led the round, with several existing shareholders increasing their stakes. The funds will support the maiden flight, recovery and reuse validation, and the construction of commercial delivery capabilities. According to the plan, Arrow Yuan Technology will complete preparations for the maiden flight of the YuanXingZhe-1 by the end of this year, followed by an opportunistic orbital launch and simultaneous validation of the first-stage recovery.

Arrow Yuan has maintained a relatively low profile in recent years, leaving behind more experimental milestones than frequently changing narratives.

Yet one path has remained steadfast.

The ocean.

01

The term "ocean" warrants a fresh perspective.

On May 29, 2025, the YuanXingZhe-1 verification rocket completed its first flight recovery test in Haiyang, Shandong.

This thin-walled stainless steel verification rocket, with a diameter of 4.2 meters, a height of approximately 26.8 meters, and a takeoff mass of about 57 tons, soared to an altitude of about 2.5 kilometers. During its 125-second flight, it executed a sequence of full-thrust ascent, variable thrust, engine shutdown, free descent, secondary ignition, deceleration, and hovering above the ocean surface before making a controlled splashdown into the sea.

This test catapulted Arrow Yuan to the forefront of China's maritime verification of reusable rockets at an early stage.

However, a year later, the coordinates of this ocean had shifted.

On July 10, 2026, the Long March 10B lifted off from the Hainan Commercial Space Launch Site, delivering a satellite into its predetermined orbit. Approximately six minutes after the rocket's first and second stages separated, the first stage returned vertically and was successfully recovered on the "Pathfinder" maritime recovery platform using a net capture method.

This marked China's first successful implementation of controlled recovery for a launch vehicle's first stage and the world's first achievement of maritime net recovery for a launch vehicle.

Among private companies, i-Space's Hyperbola-3 also includes first-stage maritime recovery as a verification goal and has already commenced related preparations centered around a dedicated recovery vessel.

Thus, today, considering "maritime recovery" itself as Arrow Yuan's core label is somewhat inadequate.

The ocean Arrow Yuan faces is already marked with footprints.

Its more distinctive position lies in attempting to weave Haiyang, maritime return, and Hangzhou Qiantang into a long-term operational tapestry.

Haiyang undertakes testing and launch capabilities, with rockets returning from the sea, while Qiantang is responsible for production, assembly, testing, and reuse. The Qiantang District boasts Hangzhou's sole seaport. When discussing the base's location, Wei Yi even mentioned the height of traffic lights, road turning radii, and dockside lifting in the rocket transportation route.

While these details may seem mundane, they are closer to the next stage of commercial space than many technological slogans.

Launching a single rocket can rely on concentrated support; however, when rockets begin to be manufactured in batches and execute continuous missions, capabilities cease to belong to a single rocket and instead pertain to the entire system.

If a recovery vessel is a piece of equipment, what Arrow Yuan aims to create is closer to a transportation system. The distinction is roughly analogous to that between a fleet of vehicles and a logistics company.

02

This also elucidates why Arrow Yuan early on integrated stainless steel, liquid oxygen-methane, and recovery and reuse into a singular product definition.

Individually, none of these elements are unique today. The ZQ-3 also employs a stainless steel body and liquid oxygen-methane propulsion, the Long March 10B has accomplished maritime net recovery, and other private rocket enterprises are exploring various maritime and terrestrial recovery methods.

Ultimately, Arrow Yuan seeks to establish not a string of technological labels but a capability for sustained operation.

Stainless steel, liquid oxygen-methane, and maritime recovery correspond to manufacturing, maintenance, and return, respectively, but all ultimately converge on a single objective: enabling a completed rocket to re-enter the launch sequence at a lower cost and shorter timeframe.

For Arrow Yuan, stainless steel is better suited for the automated welding and industrial production systems it hopes to establish; liquid oxygen-methane combustion is cleaner, reducing maintenance burdens after reuse; and maritime return minimizes the constraints of traditional terrestrial landing zones. If subsequent advancements progress from splashdown to platform capture, the costs of recovery, cleaning, and restoration could further decline.

This logic is not unfamiliar in transportation history. Containers did not invent faster ships but revolutionized global trade by significantly reducing the conversion costs of cargo among ships, ports, railways, and trucks.

The same principle applies to reusable rockets.

Recovering the first stage is merely the technological starting point for reuse. After recovery, cleaning, inspection, status assessment, and component replacement are necessary before re-entering another mission. The true determinant of costs is the time, manpower, and resources required for this entire cycle.

Thus, technological routes will gradually diffuse, and material choices may be replicated by later entrants. What is harder to catch up with is the operational efficiency formed after long-term coordination among rockets, vessels, docks, factories, sea conditions, and launch organizations.

The ocean provides Arrow Yuan with differentiation but also adds a layer of complexity.

03

Whether the maritime closed loop can be established ultimately depends on the rocket itself.

This spring, the YuanXingZhe-1 completed a full-rocket pipeline mechanical environment test. The first and second-stage liquid oxygen and methane transfer pipelines underwent various conditions, including ambient temperature static, cryogenic static, cryogenic vibration, modal, and extreme load tests.

While often overlooked, liquid rocket pipelines are continuously subjected to the combined effects of cryogenic propellants, engine vibrations, flight loads, and interstage separation shocks. Deviations in the natural frequency of a fixation method or pipeline segment can be amplified during actual flight.

In July, Arrow Yuan completed a second-stage tail compartment vibration test.

After interstage separation, the second stage continues to handle engine operation, attitude control, and final orbital insertion. The tail compartment houses critical equipment for the auxiliary power and electrical systems. This test covered low-frequency and high-frequency vibrations in the X, Y, and Z directions, followed by re-verification of structural status, installation torque, airtightness, and valve operation.

By September, the company disclosed that the YuanXingZhe-1 Y1 and Y2 had gradually been completed, with over 30 critical ground tests finished before the maiden flight. Moreover, the key structures and technical solutions of the maiden flight rocket were consistent with those of subsequent commercially delivered rockets.

The latter sentence is significant.

It implies that Arrow Yuan does not intend to make the first rocket an isolated verification artifact. If the maiden flight accomplishes critical validations, subsequent products can continue to be manufactured and delivered along the same specifications without redefining a commercial model.

This brings many issues to the forefront before the maiden flight. Considerations must include whether the design facilitates batch manufacturing, whether components are suitable for repeated use, whether maintenance is convenient, and whether product specifications can be consistently replicated.

Arrow Yuan has been preparing for this for nearly four years.

From initiating the development of the YuanXingZhe-1 in 2022 to entering the maiden flight phase by the end of 2026, this timeline is not particularly rapid in today's commercial space sector. Wei Yi's explanation reflects a deep-rooted traditional aerospace mindset: liquid rockets allow extensive ground verification, and risks that can be exposed in advance should not be deferred to the flight stage.

While commercial competition rewards speed, aerospace reliability is built on repeated exposure and validation of the unknown.

This is where Arrow Yuan's most vivid contradiction lies in recent years.

04

Stability is a capability, but in the context of financing, it also resembles an IOU.

Arrow Yuan's research and development pace has not been rapid in recent years, yet its financing has suddenly intensified this year. It completed the B round in February and the B++ round in September, accumulating over RMB 2.3 billion in six months. According to ChinaVenture, sources close to the transactions stated that each round over the past six months was oversubscribed, and the C round is also nearing completion.

The influx of capital before the maiden flight indicates that investors are willing to preemptively price a path that has not yet undergone complete validation through orbital flight.

This, of course, reflects changes in the overall industry landscape. The low-Earth orbit satellite internet requires a larger-scale supply of launch capacity, and reusability has become one of the clearest technological directions for domestic medium-to-large liquid rockets. Capital markets also have a clearer understanding of the phased thresholds for commercial rocket enterprises than a few years ago.

However, for Arrow Yuan, these RMB 2.3 billion serve a more specific purpose.

They allow for deeper validation before the maiden flight and enable batch production, recovery, and reuse systems to be established without waiting for the maiden flight results. In other words, Arrow Yuan can allocate more resources to "what comes after the first launch" rather than compressing all capabilities into "launching the first as soon as possible."

This is also an expensive choice.

Before the maiden flight, all testing, base construction, production capacity, and recovery systems can only increase the probability of success. The flight results will still ultimately determine valuations and industry positioning.

If the maiden flight succeeds, the past four years will be interpreted as solid and restrained; if it fails, the same period might be re-evaluated as overly slow, missing the window of opportunity. The facts remain unchanged; what varies is how the market interprets this timeframe.

Regarding Caesar crossing the Rubicon, history has left us with a widely cited phrase: "The die is cast." It later became a metaphor for irreversible choices.

Rocket maiden flights share a similar aspect. Before liftoff, four years of demonstrations, testing, and waiting still belong to probabilities; once the rocket takes flight, all past choices are reassessed based on the results.

This is the most ruthless aspect of aerospace.

No matter how many ground tests have been conducted, they can alter the probability of success but cannot preemptively claim success itself.

05

China's commercial space industry is emerging from a phase where "firsts" hold disproportionate value.

In the industry's early stages, records matter. The first privately developed liquid rocket to reach orbit, the first recovery, the first successful implementation of a technological route—all can rapidly alter a company's industry standing by transforming theoretical capabilities into reality.

After 2026, this logic begins to shift. The Long March 10B and the ZQ-3 Yao Er (Yao-2) have successively accomplished first-stage maritime net and terrestrial recoveries, with both technological routes now entering actual orbital missions.

As more companies surpass this initial threshold, competition naturally progresses deeper.

How many rockets can be manufactured each year? Are missions able to be carried out punctually? What is the duration required for inspecting a rocket post-recovery? How many times can a single rocket be reliably reused? What is the annual mission capacity of a given infrastructure setup? These indicators, though less eye-catching than a rocket's vertical landing, are more intrinsic to the nature of commercial transportation.

The history of the transportation sector consistently shows that while a technology may break new ground, the ultimate determinant of industry scale lies in the subsequent manufacturing, scheduling, and turnover efficiencies.

Commercial rockets are also poised to reach this juncture.

Reusability pertains to how a rocket returns; however, in commercial transportation, the ultimate competitive edge lies in how swiftly and cost-effectively it can embark on another journey after returning.

This encapsulates the broader significance of Arrow Yuan's ocean-based operations.

It doesn't need to perpetually cling to being the "pioneer." Technological milestones will inevitably be matched by subsequent entrants; what must persist is the Cycle (cycle) between Haiyang, the oceanic base, and Qiantang, capable of continuous operation.

If this cycle can be established, Qiantang's docks, Haiyang's facilities, stainless steel rocket bodies, liquid oxygen-methane propulsion systems, RMB 2.3 billion in capital investment, and those less-publicized vibration and pipeline tests will ultimately coalesce into a singular, formidable capability.

Should it fail to operate effectively, the ocean could transform into a costly endeavor.

A rocket landing in the ocean merely signifies the completion of a single flight.

For Arrow Yuan, the critical aspect is when it can embark on another mission.

After an investment of RMB 2.3 billion, this ocean-based operation truly commences its commercial cycle.