Contested space: the strategic game between the US and China

Space domination is increasingly recognized as a crucial arena of global competition and a key enabler of economic and industrial activity. But why is the acceleration in space—both technological and political—happening now? And what are its main consequences?

First of all, the new space race is taking place in an international scenario increasingly shaped by commercial and technological tensions between the United States and China. In fact, it was space itself—with its long-term perspective—that anticipated this conflict by a few decades. Let us recall the context in which this took shape.

Synergies and exclusions: when it all began 

At the end of the Cold War, the International Space Station (ISS) project offered a concrete vision for global collaboration, uniting Washington and Moscow alongside Japan, Canada, and the European Space Agency. However, during these same years, China was pointedly excluded from this partnership. This was largely the result of U.S. Congressional policies—most notably the Wolf Amendment—following 1990s-era tensions over military technology transfers and concerns over industrial espionage. By the dawn of the new millennium, space cooperation between Washington and Beijing had effectively vanished. Forced onto an independent path well ahead of its peers, China was compelled to develop its own sovereign space capabilities.

The turn of the century also marked a second pivotal shift: the founding of SpaceX in 2002. Few companies have disrupted an entire industry as radically in under a quarter-century. It is no exaggeration to say that without the innovations brought by SpaceX, the United States would likely find itself at a significant disadvantage in today's space race against China.

Given its decisive role, the evolution of SpaceX warrants close analysis. After fundamentally altering 21st-century space history with its reusable rockets—which dramatically lowered the barrier to entry by slashing launch costs—SpaceX pivoted toward global connectivity. This expansion reinforced a model of vertical integration and technological conglomeration. Today, this strategy has culminated in high-end electronics manufacturing—exemplified by the Bastrop facilities in Texas, which are currently scaling up production for Starlink hardware and in-house semiconductor packaging—and, crucially, the integration of advanced artificial intelligence into orbital infrastructure.

Gwynne Shotwell, SpaceX President and Chief Operating Officer and a pivotal figure alongside Musk, has consistently emphasized a core principle: the company must have the courage to make its own flagship products obsolete before a competitor does. This logic drives the development of Starship. Despite the Falcon family’s current dominance of the launch market, Starship is designed to eclipse it. The vision is a rapidly reusable vehicle capable of flying hundreds or thousands of times annually, effectively transforming space transport into a high-frequency market similar to civil aviation.

In Shotwell’s view, space competition is as much about human capital as it is hardware. In an organization that has grown to over 15,000 employees, the existential threat is internal bureaucratization. To counter this, Shotwell frequently entrusts young engineers with seemingly impossible projects and aggressive development cycles, intentionally stimulating an “impatience” that pushes the frontier of innovation.

However, SpaceX faces an external bureaucratic challenge in the form of government authorizations. Shotwell has noted that the company can often build and prepare a rocket for flight faster than it can obtain federal launch approval. While the U.S. defense and security apparatus now depends on these capabilities, the government remains a limiting factor. Efforts like the Department of Government Efficiency (DOGE) have notably failed to streamline these regulatory hurdles.

As the leader of the space economy, SpaceX has evolved significantly in both hardware and software. Artificial intelligence has moved from a marginal topic to the center of the company’s competitive equation. AI is now integrated into performance reviews and code writing, a transition punctuated by the recent acquisition of xAI.

This vertical integration between the world’s largest launch operator and an AI firm responds to the demands of a high-intensity investment “super-cycle.” As Musk suggests, “the limiting factor is Earth,” particularly regarding the massive energy requirements of AI development. In this context, the sky is not a limit, but an opportunity to return to Earth with a redefined balance of power.

While SpaceX built its success in opposition to legacy military-industrial complex firms, a larger ecosystem is now asserting itself. Blue Origin, backed by Jeff Bezos, remains the most formidable contender, benefiting from the significant capital advantages inherent to U.S.-based firms.

China’s strategy of self-sufficiency

As mentioned, China has long pursued a strategy of “technological self-sufficiency” or, more precisely, a policy of limited interdependence designed to reduce strategic vulnerability. Just as it has in other industrial sectors, Beijing seeks to leverage its massive manufacturing capacity and supply chain organization to lower costs and drive incremental innovations in specialized components.

Furthermore, China is investing heavily in dual-use satellite infrastructure. Partly driven by fears of “orbital containment” by the United States, Beijing has planned several mega-constellations. The combined goal of these government-announced projects is to deploy tens of thousands of low-earth orbit (LEO) broadband satellites by 2030. This integrated network is intended to connect land, sea, air, and space, supporting both global commercial communications and advanced military operations.

Despite these high-level ambitions, progress is currently hindered by significant technological bottlenecks. Most notably, the lack of efficient reusable rockets makes Chinese launches both expensive and infrequent compared to SpaceX. At this stage, China remains far from its stated goals. A key variable to monitor is whether the space sector, historically dominated by the military, will allow for the rise of the kind of dynamic private entrepreneurs recently seen in the Chinese automotive and robotics industries. For now, the Chinese Communist Party continues to prioritize state-led public-private integration while promoting its “Space Silk Road” to export technological capabilities to developing nations.

In the short to medium term, the primary arena of competition between Beijing and Washington is the Moon. Both nations are challenging one another on launch deadlines and the overall credibility of their respective lunar programs. The Moon is a critical interest not only as a military and logistical pivot, but also for future resource exploitation and as a staging ground for even more ambitious deep-space objectives.

This space race is not a one-way street, and it carries significant systemic risks. These include the dangerous crowding of low-earth orbit and the increasing vulnerability of critical infrastructure, which remains susceptible to technical failure and, increasingly, targeted kinetic or cyber attacks. 

Other players in the competition

In this emerging technological duopoly, we must also consider the role of other global players. The Russian Federation remains a traditional space power, rooted in its Soviet heritage, yet it lacks the economic resources to compete on the same level as Washington and Beijing. India’s growth has been demonstrated both symbolically and practically, although its budget still trails its ambitions as a major, non-aligned power. Other nations, from the Gulf monarchies to Turkey, are also scaling up their investments.

In this increasingly crowded landscape, the risk for Europe is falling further behind. The challenges are manifold: persistent program delays, bureaucratic friction between the European Space Agency and the European Commission, and internal contradictions among Member States. This is particularly evident in the tension between France’s established capabilities and Germany’s desire to leverage increased defense spending for innovative, yet often uncoordinated, initiatives. Recent years have been characterized by the absence of a unified industrial policy and a continued dependence on SpaceX for institutional missions, despite bold political rhetoric against Elon Musk.

At the same time, Europe’s foundations in basic and applied research, spanning astrophysics, aerospace engineering, and advanced materials, remain undeniably strong. Through ongoing industrial consolidation and a potential surge in financial resources, a reversal of the current trend remains possible. As seen in the Italian ecosystem, areas of particular promise include the conversion of automotive components for space use and the integration of robotics within the era of “physical” artificial intelligence.