Executive Summary:
- The Chinese space sector saw its largest recorded equity deal in early 2026 when CASIC Sanjiang sold a 29.6 percent stake in ExPace—the company once billed as “China’s SpaceX.” This deal signals a shift from central state-owned enterprise (SOE) dominance toward sub-national state capital.
- ExPace was once an industry trailblazer, but launch delays, a competitive commercial space ecosystem, and the reorganization of its parent company have left it behind competitors in the state-owned and private sectors.
- ExPace emerged from the People’s Republic of China’s (PRC) defense-industrial base, and a representative of Wuhan Investment Holding Group, the firm involved in the 2026 deal, noted the strategic value of its “self-reliant and controllable” industrial chain.
In early 2026, the largest recorded equity transaction in the People’s Republic of China’s (PRC) commercial space sector occurred when China Space Sanjiang Group (CASIC Sanjiang; 中国航天三江集团) sold a 29.6 percent stake in ExPace (full name: “CASIC Rocket Technology” (航天科工火箭技术)) to state-owned Wuhan Investment Holdings Group (武汉投控集团). The buyer paid renminbi (RMB) 3.3 billion ($490 million) (Hubei Provincial Department of Economy and Information Technology, April 13; 21st Century Business Herald, August 7). [1]
CASIC Sanjiang Group is a subsidiary of the China Aerospace Science and Industry Corporation (CASIC; 中国航天科工集团), one of the PRC’s main state-owned aerospace defense conglomerates and its largest missile system producer. It is also the external name and an alias for the CASIC Ninth Academy, which specializes in the development of short-range ballistic missiles (CASIC Sanjiang, January 16). As a result of the equity sale, the firm’s holdings in ExPace reduced from a roughly 56.4 percent share to a 26.8 percent stake, while the buyer, which is directly controlled by Wuhan’s State-owned Assets Supervision and Administration Commission, became the largest investor with a nearly 30 percent share (Guancha, January 7; Hubei Provincial Department of Economy and Information Technology, April 13).
On July 31, ExPace completed its registration, changing its Chinese name from “CASIC Rocket Technology” (航天科工火箭技术) to Kuaizhou Aerospace Technology (快舟航天空间科技) (Hubei Daily, August 5). The new name, which comes from the company’s Kuaizhou series of space launch vehicle, reflects the fact that it is no longer directly affiliated with CASIC. According to Hubei Daily, the change is due to the “equity restructuring” (股权结构调整), with the investment “accelerating the company’s transition to a new stage of deeper market-oriented operation” (企业加速走向深度市场化运营新阶段), a possible allusion to its forthcoming public listing (Hubei Daily, July 31). In another indication that Kuaizhou Aerospace may be preparing for an initial public offering (IPO), ExPace released a job posting this May seeking a deputy chief financial officer, whose duties include establishing financial systems and governance structures that comply with listing standards and completing IPO financial verification (21st Century Business Herald, May 22).
In the short term, CASIC Sanjiang’s sale of its majority stake in ExPace provides a financial boost while also reducing its exposure to a troubled asset that has recently suffered major losses (National Business Daily, January 7). Over the long term, however, the deal reflects the growing diversification of the PRC’s commercial space sector. While the centrally state-owned aerospace defense enterprises CASIC and China Aerospace Science and Technology Corporation (CASC; 中国航天科技集团) that have dominated the PRC space sector for decades remain in control of the vast majority of military/national space program production, the commercial space sector is increasingly competitive. Commercial space was named a “strategic and emerging industry” (战略性新兴产业) in 2023, and a growing number of new private companies and sub-national government space firms are active in the sector (CSIS, July 2026; China Brief, August 5).
The saga of ExPace, which when it was founded as the country’s first truly commercial space launch company in 2016 was often referred to as “China’s SpaceX,” from financial loss leader to hot acquisition provides a window into the industry’s tumultuous evolution over past decade (Asian Scientist, September 20, 2016; Guancha, January 7).
From Missiles to Rockets
ExPace emerged from CASIC’s efforts to adopt its Dongfeng-21 medium-range ballistic missile as the Kuaizhou series of solid-fueled launch vehicles, a part of the company’s broader efforts to accelerate military–civil fusion. The Kuaizhou rockets were initially designed as emergency rapid deployment launch vehicles for military satellites to ensure continuity of service in a military conflict. The successful test launches of the Kuaizhou-1 and -2 rockets in 2013 and 2014 by the CASIC Fourth Academy provided the PRC with a rapid space response vehicle able to quickly launch satellites (Guangming Daily, September 26, 2013; CNSA, November 24, 2014). Following the successful test launch of the Kuaizhou-2 in November 2014 that set a record for the fastest space launch in PRC history, then-CASIC Party Secretary Gao Hongwei (高红卫) stated that the “strategic significance of the Kuaizhou mission is self-evident” (快舟任务的战略意义不言而喻”) (Huanqiu, November 24, 2014).
In February 2016, ExPace was officially established and registered in Wuhan. From its founding through early 2024, ExPace was a subsidiary of the CASIC Fourth Academy that designed the Kuaizhou rockets (Jiemian, April 21, 2016; China News, January 9, 2017). After that, the CASIC Ninth Academy took control of ExPace following an organizational restructuring (see below). In its early days, ExPace attracted attention from Chinese and international media as the first PRC company dedicated to commercial space launch services (Beijing Times, April 23, 2016; Popular Science, October 7, 2016). ExPace was also the first enterprise to operate out of the Wuhan National Aerospace Industry Base, a joint effort between CASIC and the Hunan provincial government (Jiemian, April 21, 2016).
The mainstay of ExPace’s launch services has been the Kuaizhou-1A rocket, jointly developed by CASIC Sanjiang and the Harbin Institute of Technology, one of the PRC’s “Seven Sons of National Defense” universities (S&T Daily, December 27, 2024). The Kuaizhou-1A is a small satellite launch vehicle with three solid fuel stages and a liquid fuel stage that can place a roughly 400-pound payload in orbit. On January 9, 2017, ExPace undertook the first purely commercial space launch in Chinese history from Jiuquan Space Launch Center using the Kuaizhou-1A rocket to launch three small satellites into orbit for land resource monitoring, forestry surveys, environmental protection, transportation, disaster prevention and relief, and other fields (CCTV, January 10, 2017). Following the launch, Zhang Di (张镝), who at the time was serving simultaneously as ExPace chairman and CASIC Fourth Academy vice president (underscoring how intertwined ExPace and CASIC Sanjiang were), touted the cost-effectiveness of the Kuaizhou rocket series. He noted that it “currently has a payload cost of around $10,000 per kilogram, making it extremely competitive” (目前每公斤载荷运载成本在1万美元左右，价格极具竞争力) (CCTV, January 10, 2017).
Despite the success of its initial launch, ExPace’s ability to remain competitive may have been impacted by CASIC Sanjiang’s slowness to develop the Kuaizhou-11 rocket, an enhanced version of the Kuaizhou-1 with five times the payload capacity of its predecessor (CCTV, January 10, 2017). The entry of the Kuaizhou-11 into service as scheduled around 2018 would have given ExPace an early opportunity to scale its launch capacity and gain a jump on competitors. The initial launch was delayed for two years, however, and when it finally took place in July 2020, it suffered a malfunction that caused a launch failure that led to the loss of its payload of two satellites (Space.com, July 10, 2020). On December 11, 2022, the Kuaizhou-11 Y2 finally carried out a successful launch, placing a Vehicle Traffic Assistance System (VDES) satellite test into its predetermined orbit (ScienceNet.cn, December 7, 2022).
Since 2022, the Kuaizhou-11 has provided larger payload multi-satellite launch capabilities for ExPace. For example, in March 2026, the rocket was used to successfully launch eight earth sensing satellites into orbit (CGTN, March 16). The system’s long development time, however, likely impacted CASIC ExPace’s ability to compete with CASC’s Long March carrier rocket, the mainstay of the PRC’s launch industry, as well as new private competitors such as LandSpace and Galactic Energy. It nevertheless remains a key player, having developed by mid-2023 a “one-stop” capability for solid-propellant launch vehicle assembly, testing, and experimentation, with an annual production capacity of 30–40 rockets. ExPace has also developed liquid oxygen-methane (methalox) rocket engine assembly and cold-state testing capabilities (Xinhuanet, June 9, 2023).
Facing Market Competition and Restructuring Pressures
ExPace has recently struggled financially amid growing competition from both private and state-controlled companies. For example, even though it made progress on the development of reusable liquid oxygen-methane rockets, the company still lags far behind the CASC’s Long March rockets and other systems, as well as privately owned LandSpace in this key emerging technology area (SASAC, June 24, 2024; Space News, July 13; Global Times, August 6). In 2024, the firm suffered major losses. Its revenue that year totaled roughly renminbi (RMB) 64 million ($9.4 million), with a net loss of approximately RMB 180 million ($27 million) (National Business Daily, January 7). This continued the following year, with revenue from January to November 2025 at just over RMB 67 million ($10 million), and net losses of approximately RMB 136 million ($20 million) (National Business Daily, January 7).
Another issue that may have impacted ExPace in its final years at CASIC is the reorganization of its parent company, CASIC Sanjiang. In July 2024, CASIC re-established its Ninth Academy, which re-assumed control of CASIC Sanjiang—and with it ExPace—which had been associated with the Fourth Academy between 2011–2024 (CASIC Sanjiang, January 16). This reform resulted in the re-established CASIC Ninth Academy re-absorbing the CASIC military manufacturing subsidiary companies based in Wuhan and Xiaogan, Hubei. The new Ninth Academy appears to have resumed its previous focus, specializing in the development of short-range ballistic missiles (SRBMs) such as the DF-11A and DF-16 SRBMs widely used by the People’s Liberation Army Rocket Force.
ExPace’s move to the Ninth Academy was always going to be something of an awkward fit, despite its Wuhan roots. While the Fourth Academy—also known as the CASIC Academy of Launch Technology—worked heavily on space launch systems in addition to missiles, the Ninth Academy is preoccupied with tactical ballistic missiles and other aerospace weaponry. Moreover, ExPace and the Ninth Academy lacked the type of top-level organizational intertwinement that characterized the relationship between the company and the Fourth Academy.
Conclusion
Newly formed Kuaizhou Aerospace inherits a well-developed system for research, development, and production of commercial satellite launch vehicles. A representative responsible for its acquisition by Wuhan Investment Holding Group explained the thinking behind the deal, saying that ExPace provides a “complete system” (整建制). The representative stressed that its benefit is that “it is not just a link in the industrial chain but is capable of producing complete rockets within a complete supply chain” (它不是产业链的某一个环节，而是最终的集大成者——能做整箭，供应链完整). From a strategic investment perspective, they added, the firm “prefers to invest in companies that are self-reliant and controllable” (更愿意投这种自主可控的企业) (Hubei Daily, August 5).
What Wuhan values in its ExPace investment, according to one Chinese financial outlet, is not merely the company’s recent financial performance but “its existing rocket model system, engineering talent, industrial chain resources, and qualifications and engineering capabilities needed to enter the commercial launch market” (其已有的火箭型号体系、工程化人才、产业链资源，以及进入商业发射市场所需的稀缺资质与工程能力). To succeed, however, Kuaizhou “must answer three questions simultaneously” (须同时回答三道题): Can its existing solid rocket models continue to receive orders? Can its liquid rockets complete engineering verification on schedule? Can its financing cover the entire lifecycle from engine development to maiden flight and recovery? (21st Century Business Herald, August 7).
For Kuaizhou, the nearly $500 million investment from Wuhan offers a fresh start. The company’s success, however, will ultimately boil down to whether it can offer reliability, cost, and delivery in the PRC’s brutally competitive commercial spaceflight field. Should the combination of strong local support from the Wuhan government and the ability to leverage the launch knowledge and capabilities inherited from CASIC Sanjiang, the company could take a key step towards earning its one-time moniker as “China’s SpaceX.”
Notes
[1] Wuhan Investment Holdings Group is controlled and owned by the Wuhan State-owned Asset and Supervision Commission (Wuhan SASAC).
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