by LV Wenqi

China's commercial space sector is seeing a surge in launches this month, as a wave of missions and reusable rocket tests pushes the industry into a more risk-intensive phase.

Within days, a Long March-8A rocket sent 10 satellites into orbit from Hainan, followed by a Kuaizhou-11 (Y7) mission carrying eight more. More significant are upcoming tests of reusable rockets, including Zhuque-3 by LandSpace, Kinetica-2 (Lijian-2) by CAS Space and Tianlong-3 by Space Pioneer.

As the sector scales up, so do its risks, from launch failures and orbital anomalies to in-orbit malfunctions and space debris — risks that are increasingly difficult for companies to absorb on their own. The burst of activity also signals a shift from one-off technological breakthroughs to sustained, system-level operations, where risks are more frequent and increasingly interconnected.

Part of that shift is being driven by the rapid buildout of low-Earth orbit constellations. The state-backed "Guowang" constellation, led by China Satellite Network Group (China SatNet), is entering a critical deployment phase, with plans involving tens of thousands of satellites and placing greater demands on launch frequency and reliability.

At the same time, reusable rocket technologies are advancing to lower costs and expand commercial viability. Backed by policy support and fresh capital, the sector has expanded rapidly, with growth accelerating across the supply chain. Data from Askci Consulting Co., Ltd., a China-based consultancy, show the sector expanded from about 1 trillion yuan in 2020 to 2.3 trillion yuan in 2024, a compound annual growth rate of more than 20%.

A single commercial launch can involve hundreds of millions of yuan, making risk transfer critical to protecting cash flow and enabling investment. Insurance is therefore becoming central to the sector, acting both as a risk buffer and a prerequisite for financing.

A representative from Ping An Property & Casualty Insurance told Jiemian News that coverage has expanded from launch risks to the full lifecycle, including research, testing, in-orbit operations, third-party liability and contract performance.

Despite the industry's scale, annual space insurance premiums total only about 800 million yuan, highlighting limited coverage and significant gaps in areas such as R&D, supply chain disruption and revenue loss.

The shift in risk profile is also putting pressure on existing pricing models. WANG Peng, an associate researcher at the Beijing Academy of Social Sciences, said traditional actuarial models based on low-frequency launches are becoming less effective, as reusable rockets introduce nonlinear wear and tear risks while relevant data remains limited.

At the same time, satellite constellations are shifting risk from single events to system-level probabilities, requiring a move toward lifecycle-based pricing. GAO Chengyuan, an advisor to an industry association under the China International Association for Promotion of Science and Technology, said risks are becoming more frequent and more correlated, pushing insurers toward dynamic, data-driven pricing.

Market capacity also remains constrained. YUAN Shuai, an investment researcher at the China City Development Academy, said the market still relies largely on direct underwriting and reinsurance, with limited use of advanced risk-hedging tools.

Authorities are beginning to explore risk-sharing mechanisms. In March 2025, 17 insurers, two reinsurers and one brokerage formed China's first commercial space insurance consortium. By the end of 2025, it had provided nearly 7.7 billion yuan in coverage for 17 launch projects.

Analysts say further policy support may be needed, including higher-level insurance pools, mandatory third-party liability coverage and incentives to attract more capital. Insurers have also called for better data-sharing, the establishment of risk compensation mechanisms and better access to global reinsurance markets.

As China's commercial space ambitions scale up, how effectively those risks are managed may determine how far and how fast the industry can scale.