On July 10th, the Long March 10B carrier rocket soared into the sky from the Wenchang Space Launch Site in Hainan, China. Eight minutes later, its first stage descended steadily into a massive recovery net deployed in the South China Sea.
This marked a global first—a rocket without landing legs or a ground platform was directly caught by a high-strength buffer net arranged in a grid pattern. Chinese aerospace engineers have successfully completed the engineering validation of a reusable rocket using a method entirely different from SpaceX's.
Capital markets reacted swiftly, with the commercial space sector experiencing a broad surge. The China Securities Aerospace & Aeronautics Index rose 4.18% on the day, while the Aerospace & Aeronautics ETF (159227) tracking the index gained 5.45%.
The real significance for the market lies in the profound industrial transformation unfolding behind this rocket's success.
The Critical Importance of Reusable Rockets
The market's intense focus on the Long March 10B's successful controlled recovery of its first stage has a straightforward explanation: China faces an urgent and massive satellite deployment mandate.
By the end of 2025, China had filed applications with the International Telecommunication Union for frequency and orbital resources for tens of thousands of low-earth orbit satellites. The planned constellations, including "China SatNet" and "Qianfan Constellation," collectively involve over 27,000 satellites. However, ITU rules operate on a "first-come, first-served" basis—the first satellite must be launched within seven years of application, and 10% of the total constellation must be deployed by the ninth year.
The problem is that, as of the end of 2025, cumulative launches numbered less than 300, representing a completion rate of under 1%.
Calculating with an average of 20 satellites per launch, approximately 1,400 more launches are required. At the current launch cost of $8,000 to $12,000 per kilogram for expendable rockets, the economics are unsustainable. In contrast, SpaceX's Falcon 9, with reusability, has driven unit costs below $3,000 per kilogram.
The successful recovery of the Long March 10B today signifies that China has, for the first time, technically proven the feasibility of substantially reducing launch costs. According to the plan, the first stage will be re-flown by the end of this year—using the same booster for a second mission, which would complete the true commercial loop.
Some observers have drawn an analogy between the moment this rocket was caught in the net and SpaceX's first successful Falcon 9 landing in 2015. That recovery marked SpaceX's transition from an "experimental company" to a "trillion-dollar market value" enterprise.
A 3.5 Trillion Yuan Market's Triple Resonance
The data speaks for itself.
According to the CCID Think Tank, China's commercial space market reached 2.83 trillion yuan in 2025, a year-on-year increase of 21.7%. It is projected to climb to 3.5 trillion yuan in 2026, with growth potentially reaching 25%.
Behind these figures lies the simultaneous convergence of three powerful forces.
First, policy support is shifting from "encouragement" to "procurement." In 2025, the China National Space Administration released its first specialized guiding document for the commercial space sector. The Commercial Space Standard System Version 1.0 was officially launched in 2026, and the three major telecom operators obtained satellite communication licenses. Policies are now actively building the ecosystem with tangible resources.
Second, demand is both rigid and urgent. Beyond the deadline for deploying tens of thousands of satellites, applications like space-based computing power, satellite remote sensing for precision agriculture and disaster prevention/mitigation, and direct-to-device satellite communication are not just concepts but are generating real, actionable orders.
Third, technological breakthroughs are occurring at a rapid pace. From the low-altitude verification of the Long March 10A, to the successful recovery of the Long March 10B, and breakthroughs in liquid rocket engines by private companies like LandSpace with its Zhuque-3 and Space Honor, 2026 is being defined by the industry as the "critical window period for reusable rockets."
More importantly, the per-unit manufacturing cost for Chinese commercial satellites has dropped from 50 million yuan to 8 million yuan. This is not merely a price reduction but represents an industrial paradigm shift from "customized single-satellite production" to "batch manufacturing."
How to Gain Exposure to This Sector
The investment thesis for commercial space is clear, but selecting individual stocks presents significant challenges—uncertain technology roadmaps, unpredictable order fulfillment timelines, and high valuation volatility.
For most investors, rather than betting on a single company, a basket approach via an ETF may be more suitable. The focus should be on the Aerospace & Aeronautics ETF (159227).
First, it offers high purity. This ETF closely tracks the China Securities Aerospace & Aeronautics Industry Index and is one of the purest ETFs in the market for commercial space exposure, comprehensively covering leaders across the entire industrial chain, including rocket launch, satellite manufacturing, and aerospace electronics. Its top ten holdings are robust, featuring core aerospace names such as Aerospace Hi-Tech Holding Group Co Ltd (SHSE: 600879), AECC Aviation Power Co Ltd (SHSE: 600893), China Satellite Communications Co Ltd (SHSE: 601698), Kuang-Chi Technologies Co Ltd (SHE: 002625), Avic Shenyang Aircraft Co Ltd (SHSE: 600760), Avic Xi'an Aircraft Industry Group Company Ltd (SHE: 000768), China Aerospace Times Electronics Co Ltd (SHSE: 600879), Shanghai Hanxun Information Technology Co Ltd (SHE: 300762), Avic Aviation High-Tech Co Ltd (SHSE: 600862), and Avic Chengdu Aircraft Industrial (Group) Co Ltd (SHSE: 600760). This portfolio includes both major state-owned players and commercial pioneers.
Second, the ETF has substantial size and good liquidity. As of the latest data on July 9th, the fund's assets under management reached 5.2 billion yuan, making it the largest ETF tracking its index.
The story of China's commercial space sector may have just turned to its most exciting chapter. For investors, the time to consider an entry point is now.
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