China’s Push for Space-Based Applications Accelerates as Emerging Market Takes Shape

China is rapidly advancing space-based connectivity and computing capabilities in coordination with state research institutions, local governments, and commercial aerospace enterprises (both state-owned and private). Developments in non-terrestrial networks (NTNs) and space-based data centers (SBDCs) signal not only technological ambition but also a coordinated effort to shape future infrastructure. China’s progress in these space-based economic and technological fields raises important implications for multinational companies.

At the Mobile World Congress in Barcelona earlier this month, two key topics stood out:

• NTNs of satellites for land-based mobile communications and internet
• SBDCs designed to support the growing energy and infrastructure demands of AI

NTNs offer global reach to extend mobile connectivity by delivering high-speed broadband connectivity to remote areas, complementing public land mobile networks (PLMNs) to provide diverse coverage options. However, there is debate on whether users may opt to use these exclusively, questioning signal propagation and penetration capabilities for indoor and in-building coverage.

Nonetheless, at the Mobile World Congress numerous announcements from both mobile network operators and vendors trumpeted new partnerships to deliver device-to-device and vehicle connectivity from such space-based networks. NTNs are inherently enabled by 5G standards, so we anticipate increased news on this progress.

Topics will influence the future discussion of NTNs, including how global enterprises will manage connectivity, as well as potential security risks of the vendors involved in key partnerships.

Space-based data centers support growth of AI

SBDCs depend on what are known as “sun-synchronous orbits” (SSOs), which maximize exposure to solar energy. This provides a continuous source of power to fuel processing activities and could help overcome limitations that confront data center deployment on earth, such as:

• Rising energy costs, particular for applications involving AI
• Power grid infrastructure limitations for power distribution
• Security and isolation from land-based networks
• Cooling requirements that are eliminated in the vacuum of space

The demand placed on energy grids due to the rise of AI is notable. According to the World Economic Forum, large data centers consume 1.5 percent of global power, placing strain on networks and diverting resources from other applications.

China is pursuing a leading role in SBDCs. On 25 November 2025, China National Space Administration (CNSA) issued the “CNSA 2025-2027 Action Plan for Advancing the High-Quality and Safe Development of Commercial Space.”^[1] The action plan called for a focus on developing aerospace propulsion technology, advanced satellite platforms and payload technology, and integrated communication-navigation-remote sensing technologies.

Recent updates suggest these plans are now taking shape. The portion of the plan discussing data centers will target an “integrated space system architecture combining cloud, edge, and terminal technologies” and try to “allow computing power, storage, and transmission from space.”

While question marks remain regarding payloads and the cost of launching each kilogram of processing capability into orbit, the market for SBDCs is viewed as potentially significant. According to Sener, to be cost-efficient launch costs need to approach $300/kg, a major decrease from today’s $2,500/kg.

Regardless, the growing number of global state-led and commercial initiatives means that the technology is being widely studied and optimized. Success will depend on coordinating all aspects of the ecosystem, from propulsion and launch to the processing hardware. China’s approach and influence extend to the creation and coordination of such an ecosystem.

As we reported last year, CNSA has created a “Commercial Space Division” to provide regulatory oversight of a sector that may have over 600 commercial enterprises.^[2] According to Chinese industry experts, the creation of a national-level regulator will likely expedite the approval process for various commercial space activities.^[3]

The global availability of processing capabilities will have significant implications. Enterprises can more quickly leverage such assets when establishing operations in new and even remote locations, such as for mining and ore processing. As such, SBDCs could support and even accelerate China’s overseas investments, and the additional security they offer may provide new levels of protection for China's state-based or military activities.

^[1] https://www.cnsa.gov.cn/n6758823/n6758839/c10719382/content.html

^[2] https://www.gd.xinhuanet.com/20251130/0aee3505b54e4529a9dc01ab505e8be1/c.html

^[3] https://www.xinhuanet.com/fortune/20251201/f905e1ce712b4929ad31a451ddfc512d/c.html