Written by: Rita

Trends Guide

On July 10, China's Long March 10 B rocket successfully achieved orbital-level sea recovery, becoming the world's third entity to master this technology after SpaceX and Blue Origin. Morgan Stanley promptly released a report with a straightforward and powerful title: "Don't Underestimate China's Long March Series Catch-Up." Morgan Stanley believes that SpaceX's biggest long-term competitive threat comes from China, rather than domestic competitors in the United States. China has planned over 38,000 low-orbit satellites (State Grid 12,992, Qianfan 15,000, Honghu 10,000), and orbital calculations have been incorporated into the 14th Five-Year Plan, with 2,800 "star computing" orbits supercomputing networks already initiated. This is not a far-sighted plan, but an advancing reality.

Long March 10 B's First Flight and Recovery, Progress in China's Aerospace Catch-Up Exceeds Expectations

On July 10, the China Aerospace Science and Technology Corporation successfully launched the Long March 10 B rocket, completing its first orbital flight and recovering its first stage rocket at sea using a floating net hook system for the first time. This experiment marks China's first successful controlled recovery of an orbital-level rocket, a crucial step toward regular rocket reusability. China has become the third country to successfully recover an orbital-level rocket after SpaceX and Blue Origin.

Long March 10 B is a reusable single-core version of China's Long March 10 rocket family, designed for low-orbit missions with a payload capacity of about 16 tons under a reusable configuration, while also serving as a technology verification for China's future manned moon landings and larger launch vehicle systems.

Morgan Stanley believes that the technological significance of this recovery has been underestimated by the market. US Space Force officials estimated at the beginning of the year that it would take China about 3.5 years to master rocket reuse technology; today's Long March 10 B may have accelerated that timeline. China has not yet demonstrated conventional reusability or re-flight capability, but the technological path has already been opened up.

China's Aerospace Ecology: Government-Driven + Commercial Companies, Unfathomable

China has a severely underestimated aerospace ecological system. The government-led Long March rocket family supports the national goal of a manned moon landing by 2030, while commercial rocket companies such as Landspace, Galactic Energy, and Starship are also rapidly catching up. In 2025, China conducted a total of 90 orbital launches, making it the second-largest launch nation in the world after SpaceX, far exceeding Rocket Lab's 18 launches.

Landspace's Zhuque-3 successfully entered orbit in 2025, with the next flight attempting first stage recovery again, followed by missions for reusability and re-flight. Reusable models of Long March 9, Long March 10, and Long March 12 are all under development.

Morgan Stanley believes that China's manufacturing foundational capabilities can create comprehensive acceleration in launch frequency, rocket production, satellite deployment, and infrastructure construction, which poses the greatest long-term competitive threat to SpaceX's launch business.

China's LEO Constellation and Orbital Computing: From Planning to Reality

China's LEO satellite constellation has transitioned from planning to actual deployment. The State Grid (GW) constellation plans 12,992 satellites, of which 1,299 must be deployed by 2029; Qianfan (G60/SpaceSail) plans 15,000, aiming to complete 1,296 by the end of 2027; and the Honghu constellation plans 10,000. By the end of 2025, Chinese operators had submitted spectrum applications for over 190,000 non-geostationary orbit satellites to the International Telecommunication Union, essentially a strategic positioning of orbital resources.

More noteworthy is orbital computing. China has included space computing in its 14th Five-Year Plan, aiming to advance aerospace, satellite internet, AI computing, and integrated space and earth digital infrastructure. The China Aerospace Science and Technology Corporation has planned a five-year space data center project, integrating cloud-edge-end capabilities. In May 2025, ADA Space and Zhi Jiang Laboratory launched the first batch of 12 satellites, aiming to build a "star computing" orbital supercomputing network of 2,800 satellites.

Morgan Stanley views China as the most important long-term competitor in the field of orbital computing due to national support, domestic launch capabilities, satellite manufacturing scale, and sustained policy focus.

Trends Perspective

The core judgment of Morgan Stanley's report is that China is becoming SpaceX's biggest long-term competitive threat. Catching up requires SpaceX to stand still, while becoming a threat requires SpaceX to continue improving, but China is advancing faster. The gap in launch frequency is rapidly narrowing, with SpaceX projected to conduct 165 launches in 2025 and China 90, while China's commercial rocket companies' reusable models are expected to be intensively operational from 2026 to 2027.

For SpaceX investors, China's catch-up is a long-term variable that needs to be continuously tracked. China's rocket reuse technology has already proven its feasibility; the next step is to prove its economic viability. Once China brings its launch costs close to SpaceX's level, the pricing power and market share patterns of the global launch market will face reevaluation.

For A-share investors focusing on the Chinese aerospace industry chain, breakthroughs in rocket recovery technology mean the logic of decreasing launch costs is being realized, benefiting downstream satellite internet and orbital computing business models. If launch costs indeed decrease, the deployment speed of China's LEO constellation may exceed market expectations.

Disclaimer

This article is a整理与解读 of a third-party brokerage report (Morgan Stanley, July 10, 2026) by Trends Research. The ratings, target prices, earnings forecasts, and related judgments quoted in the article are the views of the brokerage's analysts and represent the positions of their respective institutions, not the views of Trends Research, nor do they constitute any investment advice.

The market has risks, and decisions should be independent. This article should not be used as the basis for buying or selling any securities.