SpaceX, meet "Link Space."

Rocket Lab, meet "OneSpace."

In space as here on Earth, success inspires imitation, so it was probably only a matter of time before we began seeing Chinese companies spring up to imitate the success of American "new space" companies like SpaceX and Rocket Lab.

Ever since SpaceX roared onto the space scene with its successful launch of a single-engine Falcon 1 rocket in 2009, global space companies (and even entire spacefaring nations) have been wondering how they're going to be able to compete against a company that launches satellites into orbit for prices as low as $62 million a pop. The solution China hit upon in 2014 was to jump-start its own private space industry by authorizing private investment in spaceflight.

China's new space regime began bearing fruit almost immediately, with tiny Link Space Aerospace Technology Inc. conducting a "hover" test on a prototype reusable rocket (designed to launch, then land back on Earth) in 2016. Last year, Link Space gained widespread publicity when it published a presentation outlining plans to evolve into a manufacturer of both satellites and rockets to carry them. However, with Link Space targeting payloads of no more than 200 kilograms -- and its first commercial launch not expected to take place before 2021 -- it poses no immediate threat to SpaceX.

Artist's depiction of Beijing OneSpace OS-X rocket

Tiny OneSpace wants to become the biggest small-satellite rocket launcher in the world. Image source: Beijing OneSpace.

A more immediate threat

Enter Beijing OneSpace Technology Co., Ltd., the latest private Chinese company to challenge America's new space industry.

Established in 2015, just one year after China gave its blessing to private space launch endeavors, OneSpace is actually one year newer than Link Space (which set up shop in 2014). Yet last month, OneSpace arguably leapt ahead of its rival when OneSpace launched a prototype suborbital OS-X rocket dubbed "Chongqing Liangjiang Star" to an altitude of 127,106 feet. That's "only" 24 miles up, and less than half the distance to what physicists generally consider "space." Still, it's a pretty remarkable accomplishment for a company less than three years old.

OS-X stands 29.5 feet high and masses just 7.2 metric tons. For comparison, SpaceX's reusable Falcon 9 rocket stands 70 meters tall and weighs more than 1,400 tons. The OneSpace rocket is single-stage, powered by a single, expendable, solid rocket booster, and can carry only 100 kg of payload -- and it can't even carry that into orbit just yet. But already, OneSpace is working on an improved model that it calls OS-M, and plans to test fly that one later this year.

Assuming that test flight is successful, OneSpace hopes to rush into commercial operation at breakneck speed, launching as many as 10 times in 2019, en route to becoming "one of the biggest small-satellite launchers in the world."

What it means to investors

OneSpace's rockets won't be reusable, will carry tiny payloads, and haven't even reached orbit yet. Based on these facts, it's unlikely OneSpace poses any kind of a threat to the business models of SpaceX, United Launch Alliance, or Ariane just yet.

For that matter, the early stage of development of companies like Link Space and OneSpace means China's commercial space industry remains pretty far behind even Rocket Lab in its development. (Rocket Lab successfully put its first payload in orbit in January, and is already contemplating a second launch this month or next.) But already, I can see these companies as potentially encroaching on the similarly nascent businesses of companies like Vector (although that one's already landed several paying customers for its upcoming launches) and Virgin Orbit (which has been very busy conducting powered test flights of its launch vehicles these past few months).

For now, America's private new space industry retains a considerable lead over its new rivals from the east. But China seems intent on closing the gap. Investors, looking for an opportunity to invest in this newest of "far out" industries, should keep a close watch on developments from China.

The first of these private companies to IPO and win public funding for its development work could become the first small space launch company to dominate the industry.

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