Some time ago, a reader left a comment on the official WeChat account “Anti-Entropy,” inquiring about my views on Kuaizhou and Western Aerospace.

The question caught me a bit off guard. Kuaizhou has been conducting launches for several years. On September 17th of this year, the Kuaizhou-11 completed its seventh mission, bringing the total number of Kuaizhou series launches to 40. Western Aerospace, on the other hand, is a newly established company based in Xi’an, founded this past March with a registered capital of 500 million yuan. Its shareholders include Triangle Defense, West Test, Xi’an Ruitou Energy Technology, and the Shaanxi Aerospace Power Research Institute.

One company has a long history of launches, while the other is just starting out—they seem to belong to different categories. However, shifting the focus from specific rocket models to the companies themselves reveals an emerging trend in China’s commercial rocket sector.

Over the past decade, we’ve grown accustomed to a particular growth trajectory for commercial rocket companies. Founding teams establish a company, secure financing from primary markets, and then build technical teams for propulsion, structures, control, and other systems. Gradually, they develop testing, manufacturing, supply chain, and launch capabilities. Companies like LandSpace, i-Space, Galactic Energy, and Space Pioneer have all followed this path, albeit at varying speeds.

This generation of companies started from scratch, simultaneously developing rockets, supply chains, and the companies themselves.

By 2026, a new wave of entrants began to emerge. These companies entered the industry already equipped with established models, manufacturing capabilities, research resources, or regional industrial foundations. The challenges they face are no longer the same.

China’s commercial rocket sector is now witnessing the rise of a ‘second-tier player.’

01

The first wave of entrepreneurship in China’s commercial rocket sector was essentially about proving whether market-driven companies could enter a high-barrier industry long dominated by the national aerospace system.

After 2014, commercial aerospace policies gradually relaxed, and a wave of rocket companies emerged. At the time, the industrial chain was incomplete, and many critical capabilities had to be built in-house. Over the past decade, the industry has judged company progress based on several technical milestones: engine testing, first flight, orbit insertion, payload capacity, and reusability.

Now, the first batch of companies has reached a new stage. By the end of 2025, the Shanghai Stock Exchange issued relevant review guidelines, requiring commercial rocket enterprises applying under the fifth set of listing standards for the Science and Technology Innovation Board to have successfully launched and orbited a payload using a medium-to-large reusable launch vehicle by the time of application.

A decade ago, commercial rockets were striving for their first orbit insertion; today, the technical bar has been raised to medium-to-large and reusable rockets.

This means that if newcomers still start from scratch as they did a decade ago, they’ll be chasing not just technical progress but also the launch experience, manufacturing capabilities, and capital advantages accumulated by earlier companies.

New entry strategies are beginning to emerge.

02

Kuaizhou exemplifies an alternative path.

It’s not exactly a new rocket. Its predecessor, ExPace, was founded in 2016. The Kuaizhou-1A and Kuaizhou-11 have accumulated an extensive launch history, with the Kuaizhou series completing its 40th launch this September.

In April of this year, the Wuhan Investment Control Group led the establishment of the Wuchuang Xinghang Fund, acquiring a 29.5904% stake from the Third Academy of CASIC for 3.29985 billion yuan, making Wuhan state-owned assets the largest shareholder. In late July, the company was renamed “Kuaizhou Aerospace Space Technology Co., Ltd.”

This puts Kuaizhou in a very different position from the startups of a decade ago. While companies like i-Space and LandSpace had to build their technical and manufacturing capabilities from scratch, Kuaizhou already has established models, a supply chain, and a launch record. Its challenge now is to prove whether these existing capabilities can translate into sustained orders and revenue.

Data disclosed by the Beijing Equity Exchange shows that ExPace had revenue of 63.8078 million yuan in 2024 and a net loss of approximately 180 million yuan. Forty launches demonstrate technical and mission experience, but business performance is another matter.

Especially with the accelerated deployment of large constellations and the growing focus on medium-to-large liquid rockets and reusability, solid rockets still have a market for rapid response, network replenishment, and dedicated launches, but they need to redefine their position.

The first generation of commercial rocket companies built capabilities after establishing the company; Kuaizhou is doing the opposite—repackaging existing aerospace capabilities into a market-competitive company.

03

Western Aerospace is taking a different approach.

In March of this year, Triangle Defense, West Test, Xi’an Ruitou Energy Technology, and the Shaanxi Aerospace Power Research Institute announced the joint establishment of Western Aerospace Technology (Shaanxi) Co., Ltd., with a planned registered capital of 500 million yuan. Its business covers satellites, rockets, measurement and control, and data applications.

Its foundation lies in its shareholders and regional industrial capabilities. Triangle Defense has long been involved in manufacturing large aerospace forgings, while West Test specializes in inspection, testing, and reliability services. Shaanxi is home to numerous aerospace research institutes, manufacturing enterprises, and supply chain companies.

Unlike early startups that first assembled a team and then sought industrial resources, Western Aerospace is built on Shaanxi’s established aerospace industrial base. Joseph Schumpeter once described innovation as “a new combination,” and this is somewhat similar: manufacturing, testing, and R&D capabilities previously scattered across different companies and institutions are now integrated into a new corporate system.

However, abundant resources do not automatically equate to full rocket capabilities. Rockets ultimately test system design, integration, quality control, and manufacturing organization. For Western Aerospace, the real challenge is how much of Shaanxi’s accumulated aerospace capabilities can be translated into its own full-rocket and delivery capabilities.

04

Similar changes are not limited to Kuaizhou and Western Aerospace.

China Aerospace Science and Technology Corporation (CASC) has continuously increased its investment in China Commercial Rocket (CCR) over the past two years, raising its registered capital from 1.396 billion yuan to 4.172 billion yuan by 2026. New platforms involving local state-owned assets, industrial funds, constellation companies, and traditional aerospace institutions have also emerged in Guangdong, Shanghai, and other regions, extending their business to commercial launches, maritime launches, and rocket-related equipment.

A decade ago, commercial aerospace first required entrepreneurs to take the plunge. Today, engines, materials, manufacturing, testing, measurement and control, and launch infrastructure have gradually formed an industrial chain. Newcomers no longer have to start from zero.

Similar changes have already occurred in the new energy vehicle industry. Startups initially captured attention, but once the market expanded, traditional automakers, local industrial groups, and supply chain companies quickly entered. Commercial rockets are far less mature than automobiles, but the sources of participants are undergoing a similar transformation.

In the early days, the ability to build a commercial rocket was a rare capability; today, the greater challenge is delivering capacity to customers reliably, consistently, and at low cost over the long term.

The so-called “second-tier player” refers precisely to this shift: they may not start from scratch but enter the market with traditional aerospace capabilities, local manufacturing bases, or industrial capital.

Their starting point may be higher, and their governance more complex. Ultimately, reliability, cost, production capacity, and order volume will determine the competitive outcome.

The first batch of commercial rocket companies proved that market-driven entrepreneurship could enter the rocket industry; now, more established aerospace capabilities and manufacturing resources are re-entering the market. Over the next few years, the commercial rocket sector will see even more players from diverse backgrounds. The companies that ultimately dominate the mainstream launch market will be those that can truly convert resources into low-cost, reliable delivery capabilities.