Nearly 100 startups established in the industry as investors see rich prospects

China's commercial space sector is set for strategic growth in 2019 and more efforts are needed to promote the sustainable development of private space companies, said deputies at the two sessions.

Lei Jun, chairman of Xiaomi, and a deputy to the 13th National People's Congress, said despite being a relatively new entrant to the global commercial space arena, China has seen strong momentum in recent years with nearly 100 startups established to engage in fields such as rocket or satellite design and production.

But China currently does not have a space law to ensure private companies' rights to engage in commercial space activities. More legal efforts are needed to specify the interests of companies, Lei said.

The seasoned executive and angel investor also called for more policy support from the government to open the aerospace manufacturing infrastructure to private companies, in a broader push to build an ecosystem for the sustainable growth of the commercial space industry.

Lei's comments came after private space companies iSpace and One-Space last year succeeded in their respective efforts to send their designed and produced rockets into suborbital space, which is significantly lower than orbital altitudes. Another startup, LandSpace, launched its first orbital rocket carrying a small satellite in October, but the cargo did not reach its target orbit.

Their pioneering efforts are attracting money from cash-rich investors. In 2018, these three rocket startups held a fundraising round, with each raising 700 million yuan ($101.95 million) to 800 million yuan.

Shunwei Capital, an investment firm affiliated with Lei, has participated in the fundraising of iSpace, and other aerospace startups such as Galaxy Space and Deep Blue Aerospace.

Last year also marked the first time that China had launched more rockets into orbit than any other country in a single year. China had 39 orbital launches in 2018, accounting for one-third of the world's space missions last year.

Hu Shengyun, a senior rocket designer at China Aerospace Science and Industry Corp, and a deputy to the 13th NPC, said after years of preparation and development, China's aerospace sector is seeing more players in addition to the country's big two State-owned tech giants CASIC and China Aerospace Science and Technology Corp.

Ma Chunfeng, general manager at Shenzhen-based Qianhai Wutong Mergers and Acquisitions Funds, said private space companies are working hard to reduce costs and improve the efficiency of rocket launches, which would enable China's commercial space sector to have broad opportunities and scope for growth, although it won't yield profits in the short term.

"Many of these startup entrepreneurs are former employees of State-owned high-tech institutions. They left because they see the opportunities and timing," said Ma. His company invested in OneSpace during two rounds of funding in 2018.

Backed by the nation's strategy of military and civilian integration since 2015, private startups in the commercial space sector have mushroomed.

The Space Report 2018, issued by the Space Foundation, an organization to promote the global space community, said that the global space economy totaled $383.5 billion in 2017.

Analysts predicted that China's commercial space sector, including rockets, satellite applications, and space-to-ground internet connections, is still in its infancy, but it will grow into a multibillion dollar market by 2020.