China’s commercial space sector is expanding rapidly, raising security concerns in the United States due to its growing scale and close ties to the Chinese military, according to a recent analysis by the Center for International and Strategic Studies (CSIS).

Since private investment was formally allowed in 2014, the number of Chinese companies involved in space-related activities—including satellite communications and launch services—has surged from a few dozen to approximately 600. This growth is accompanied by the development of new aerospace manufacturing hubs across China and the establishment of multiple launch facilities, increasing the country’s capacity to place satellites in orbit.

At least 10 startups have emerged to challenge the dominance of the state-operated Long March rockets, which previously held a monopoly on satellite launches in China. Many of the firms, despite presenting a commercial profile, maintain close connections with the Chinese government and contribute to space infrastructure that serves the interests of the People’s Liberation Army (PLA).

Two companies, Guowang and Thousand Sails, plan to deploy more than 10,000 satellites each, positioning them as direct competitors to SpaceX’s Starlink constellation. China aims to build extensive broadband networks in low Earth orbit with dual civilian and military applications.

China has also invested heavily in large-scale automated manufacturing plants, or “gigafactories,” capable of producing between 4,100 and 5,000 satellites annually—a substantial increase from around 500 satellites produced each year just three years ago.

Kari Bingen, former Pentagon official and lead author of the CSIS report, emphasized the rapid pace of China’s commercial space developments, noting that U.S. attention has largely remained focused on the PLA’s lunar ambitions and direct military threats in space, while overlooking this broader industrial expansion.

The report outlines that China is applying a familiar industrial strategy used in sectors like electric vehicles, combining centralized directives, regional competition, subsidies, and selective market liberalization to accelerate innovation and gain a competitive edge internationally.

CSIS highlights that commercial space systems are becoming critical infrastructure supporting global communications, economic activity, and national power, suggesting that dominance in this arena could influence the international strategic balance.

Previous reports indicate Chinese satellite companies have supplied Iran with imagery that aided targeting of U.S. military assets in the Middle East and supported Iran-backed Houthi rebels in Yemen. Additionally, CSIS notes that Chinese firms are integrating space services into the Belt and Road Initiative, a development described as creating a “Space Silk Road” aimed at expanding China’s influence on space-based infrastructure globally.