Government Policy or Market Mechanism, Which Is Better for Chinese Private Rocket Enterprises

Abstract

In 2015, Chinese Government issued the<i> Notice on the National Civil Space Infrastructure Medium - and Long-Term Development Plan (2015-2025)</i>, announcing that it would support and guide social capitals to participate in the application and development of national civil space infrastructure construction. Later, Chinese private companies are allowed to apply for launch licenses, breaking the traditional model of allocating funds from the state budget and developing rockets only by the "national teams". Many Chinese private rocket companies were registered and established afterwards, and some of them have successfully launched rockets several times in recent years. At the same time, Chinese private rocket enterprises are also facing with many problems, including the low success rate of rockets, the risk of rocket debris falling, high space insurance rates, space junk, talent competition, and corporate survival, etc. In 2023, the Chinese Government issued <i>Notice on Strengthening the License Management for Civil Space Launch Projects</i>, which requires the third-party liability insurance policy and space debris mitigation plan for launch licenses application, meanwhile the last sub-stage of the launch vehicle should de-orbit according to the regulations after taking measures such as passivation, using government policy tools to regulate and guide the development of private rockets. In conclusion, in order to promote the healthy development of commercial launch service industry, the market mechanism should play a leading role, while appropriately regulation and adjustment from the government policy are also needed. In addition, this paper also suggested that the Chinese government should carry out overall planning for the division of labor and product models of state-owned and private rocket companies.