Chinese space-technology players are closing in on Elon Musk's company and looking to grow their reach, experts say

China is looking to rival SpaceX's Starlink in the satellite sphere.

While SpaceX prepares to put its Starship rocket in orbit for the first time, foreign countries like China are looking to develop their own technology to rival Elon Musk's company.

SpaceX's (SPCX) ascent in the rocket-launch industry has pushed China to make swift progress of its own, according to experts. And with China gaining ground, its homegrown companies could start competing with SpaceX before long.

"With recent advances, China is very close behind the U.S. lead on launch and is the second-largest provider of launch services globally," said Patrick Besha, a professor at Georgetown University who studies the political space economy and U.S.-China competition.

In July, China successfully recovered the first-stage booster from a Long March 10B rocket for the first time, marking a milestone toward its development of reusable rockets. That technology is what has helped SpaceX keep costs down and improve its launch cadence over the years. The Long March milestone came six months ahead of expectations, according to Bernstein analysts, who called China a "serious competitor" in the long term.

Then this week, China carried out four launches within 48 hours using multiple providers, including LandSpace and the state-owned China Aerospace Science and Technology Corporation. In addition to highlighting the growing diversification of China's launch industry, some of the missions carried notable payloads.

A Long March 12 rocket this week delivered nine satellites for the Guowang megaconstellation - China's answer to SpaceX's Starlink satellite-internet service. More than 200 satellites are now active in that constellation, according to Jack Congram, a researcher covering China's space industry. For comparison, it's estimated that SpaceX has roughly 11,100 working Starlink satellites, according to data from the astronomer Jonathan McDowell.

SpaceX doesn't directly compete with China's launch providers; the nation's two major conglomerates and its legion of startups primarily sell to their own government. But that could change, Besha said.

"China would like to sell to other countries, either to launch their satellites or to sell a complete package - satellite, launch, downlink [communications]," Besha told MarketWatch in an email. He pointed to potential competition for services like what Starlink provides outside of the U.S. and China.

Expanding to serve foreign customers would bring Chinese firms into closer competition with not just SpaceX, but also Rocket Lab (RKLB) and other U.S. rocket-launch firms, Besha noted. It could also drive competition in Europe, where launch providers see a potential opportunity as SpaceX focuses its efforts on Starship, a massive rocket that will primarily be used for internal use.

"I can tell you SpaceX has already gone captive because we have a whole bunch of customers coming to us and saying, 'Oh my God, can you fly us?'" said Giulio Ranzo, CEO of Italian aerospace company Avio (IT:AVIO) $(AVVSY)$, on a recent earnings call.

SpaceX has reportedly started turning away customers seeking to reserve slots on future Falcon 9 rideshare missions, and analysts expect it to steadily launch fewer and fewer missions with the Falcon family before retiring the rockets entirely by the mid-2030s.

On the Avio earnings call, Ranzo said that customers rebuffed by SpaceX used the recent International Space Summit in Paris to lobby European officials to encourage them to buy locally. They could have some luck, since European nations have been ramping up investment in sovereign space capabilities to rely less on SpaceX.

Several European countries have announced major initiatives recently. This month, the U.K. outlined a space strategy backed by $10.4 billion in funding through 2030. Space startups like the U.K. satellite manufacturer Open Cosmos and Spanish reusable-rocket maker PLD Space have also recently closed new funding rounds.

Christophe Bruneau, CEO of France's ArianeGroup (FR:AIR) $(EADSY)$ (FR:SAF) $(SAFRY)$, told reporters this month that the company was exploring deploying more of its heavy-launcher vehicles to help with an expected launch bottleneck. Germany's Isar Aerospace also said this week that it plans to more than double its launch capacity in 2028 to meet high demand.

"We'll see how Europe will react," Avio's Ranzo said. "But, for sure, now we have a whole wave of small customers who no longer have that option available and would like to leverage ours. And we're more than happy to help if we can."

-William Gavin