The Emerging Trillion-Dollar Market: Set to Become the Biggest Battleground Between China and the U.S.

Recently, a special “ticket” has been causing a stir among Tesla shareholders — it could lead to the world’s largest IPO ever, with an estimated valuation of $1.5 trillion. Meanwhile, across the Pacific, the founders of several Chinese tech companies are staying up all night, preparing to submit their IPO prospectuses to the Securities Regulatory Commission for the STAR Market. The common thread linking these two capital feasts is one key phrase: commercial space. In the final month of 2025, global capital markets’ attention is almost entirely focused on this keyword.On one side, in Wall Street, investment tycoon Bill Ackman has proposed an innovative scheme that would allow Tesla shareholders to directly invest in Elon Musk’s SpaceX through Special Purpose Acquisition Rights (SPARCs), or monetize this right. This is seen as a clear prelude to SpaceX’s pursuit of the largest IPO in history, with rumors circulating about a target valuation as high as $1.5 trillion, nearly matching the historic record set by Saudi Aramco.On the other side, on the official website of China’s Securities Regulatory Commission, several companies, such as “Blue Arrow Aerospace,” “Galaxy Power,” and “Tianbing Technology,” have updated their IPO guidance status to “Completed,” marking 2025 as the “Year of Capitalizing China’s Commercial Space” and signaling the beginning of a competitive race to list on the STAR Market.

Although the scale of forces may appear dramatically different — after all, SpaceX’s valuation is currently tens of times that of all Chinese commercial space companies combined — they both point to one undeniable truth: commercial space, a super race combining cutting-edge technology, national strategy, and trillion-dollar capital, has become the most contested battleground in both the U.S. and China for technology, industry, and capital.The Battle for “Sky” — The Core of the U.S.-China “Land Grab”.The primary focus of the U.S.-China competition is, first and foremost, the “sky” above. According to the International Telecommunication Union’s rules, satellite positions in Low Earth Orbit (LEO) and communication frequency resources follow the principle of “first come, first served,” with deployment required within a specified timeframe after application, or the resources will become invalid. Since its launch in 2015, SpaceX’s “Starlink” has launched over 10,000 satellites, with the ultimate goal of creating a space internet “constellation” of 42,000 satellites, effectively occupying 80% of near-Earth orbital capacity and pushing later entrants into the dilemma of “no space to occupy, no frequencies to use.”China has planned several massive satellite constellations, such as GW and Qianfan, and has applied to the International Telecommunication Union for a total of 51,300 low Earth orbit satellites. However, as of November 2025, China has only deployed around 300 low Earth orbit satellites, which is a vast difference compared to SpaceX. Clearly, for China’s massive satellite constellations to succeed, they must accelerate their efforts in this space “land grab” race.

The Core Engine: Reusable Rocket Technology.The key engine driving this rapidly rising new race is reusable rocket technology, widely recognized as the only key to reducing space launch costs and unlocking trillion-dollar application markets. SpaceX’s Falcon 9 rocket has achieved a recovery success rate of over 91%, reducing the cost of launching per kilogram to around 20,000 RMB. Meanwhile, China’s private space company, Blue Arrow Aerospace, has had mixed results with its “Zhuque-3” rocket, which successfully launched into orbit on December 3 but failed its recovery test due to an anomaly in the landing stage. A subsequent launch of the Long March 12A on December 23 was successful in reaching orbit but failed in stage-one recovery, highlighting the existing technology gap.There is no denying that China and the U.S. currently face nearly a comprehensive disparity in commercial space. In terms of payload capacity, SpaceX’s “Starship” can carry 150 tons to low Earth orbit, while China’s most powerful Long March 5 rocket can only carry about 25 tons, a difference of nearly six times. In terms of business ecosystem, SpaceX has built a multi-dimensional empire encompassing “rocket launches + Starlink operations + deep-space transport,” with a projected 2025 revenue of $15 billion, more than half of which comes from Starlink. In contrast, Chinese companies still primarily focus on launch services and have not yet formed a sustainable profit cycle.China’s Rapid Catch-Up.However, China’s catch-up is proceeding at an astonishing speed.

On the policy level, the STAR Market has reopened IPO channels for hard-tech companies like commercial space. The 14th Five-Year Plan for Space Development has incorporated commercial space into top-level design, with the China National Space Administration (CNSA) setting up a department to oversee commercial space, emphasizing the goal of becoming a “space power” and driving technological breakthroughs and industry chain coordination. On the technical front, the “Zhuque-3” rocket achieved a rapid development timeline, going from project initiation to its first launch in just 28 months. This period includes design, manufacturing, ground testing, and flight verification, setting a domestic record for the fastest development of a large reusable rocket.Unlike the U.S., where SpaceX relies heavily on NASA’s technology transfer and mature private capital markets to consolidate its dominance, China’s commercial space road is taking a different approach. Both state-owned entities (such as CASIC and CASC) and private companies are pursuing multiple technological routes simultaneously. The state-owned entities focus on cutting-edge strategic exploration and major national projects, while private firms leverage their flexibility to develop low-cost rockets, commercial satellite operations, and downstream application innovations.“Reusable” technology has become a standard feature and the key direction for China’s commercial space development.

Public information shows that private companies like Blue Arrow Aerospace and Tianbing Technology plan to continue the first flights of new reusable rockets from late 2025 to the first half of 2026, with the ultimate goal of reducing the launch cost per kilogram to below 20,000 RMB. Even SpaceX, with its mature technology, faced several failures before successfully recovering its Falcon 9 rocket in 2015. The “Starship” prototype still encountered an explosion during its ninth test flight this year.Ecological Competition in the Trillion-Dollar Market.The most perceptive capital has already taken action in this truly “starry” market. Industry reports show that the Chinese commercial space market size grew from approximately 0.38 trillion RMB in 2015 to 2.3 trillion RMB in 2024, with a compound annual growth rate (CAGR) of 22%. By 2025, the market size will exceed 2.8 trillion RMB. As the industry transitions from the “technology validation phase” to the “capital realization phase,” a capital feast covering the entire rocket and satellite industry chain is accelerating. In December, China’s commercial space sector saw explosive growth, with stocks of companies like China Satellite, Superjet, and Shenjian rising sharply, becoming the brightest new stars in the market.From a capital perspective, the value release of commercial space will unfold in three phases: first, rocket and satellite manufacturing, which will see rapid growth as reusable technology matures and satellite constellation construction begins; second, ground applications and terminal services, including satellite communication, navigation augmentation, remote sensing data services, and more; and finally, new industries such as space computing and space manufacturing will emerge.

The Key Application Explosion Point.Beyond the progress of reusable rocket technology, another crucial turning point lies in opening the application sector. By 2025, China’s three major telecom operators will receive satellite mobile communication licenses, and mainstream smartphone manufacturers such as Huawei and Apple have already launched phones with satellite communication capabilities. The ability to connect directly to satellites from mobile phones, transitioning from emergency use to daily application, signals that the consumer satellite internet market is on the verge of breaking through.Furthermore, from the demand side, AI training and inference’s hard constraints on power and heat dissipation are forcing computational power to “go to space.” Low Earth orbit satellites can operate 24/7 using solar power and radiative cooling, nearly eliminating limitations from land, water, and electrical grid approvals, thus providing a new energy path for high-energy-consuming computational power. As a result, space computing is set to become the core direction for unlocking commercial space’s “value elasticity.”According to predictions, if 2% of global computational power is transferred to space by 2029, it would correspond to 6,800 rocket launches in China and 15,000 launches worldwide. For major countries, this competition across the starry sea is essentially a contest for control over the global infrastructure of the digital age. And this competition has no endpoint, only the next launch window.“We choose to go to the moon, not because it is easy, but because it is hard.”This famous quote from U.S. President John F. Kennedy’s speech in September 1962, “We Choose to Go to the Moon,” might just be the best epitaph for the shared challenges and destiny that both China and the U.S. face in this trillion-dollar commercial space race.