The transformation of outer space from a scientific frontier into a core domain of economic, military, and geopolitical power has become one of the defining features of the 21st century. No longer the sole purview of Cold War superpowers or the setting of symbolic moonshots, space has evolved into a complex ecosystem of commercial innovation, critical infrastructure, and strategic rivalry. This shift is especially evident in the intensifying competition between the United States and China, whose contrasting models of space governance and investment are reshaping the global orbital landscape.
The economic stakes are high. According to the Space Foundation,[1] the global space economy reached $546 billion in valuation and is projected to exceed $1 trillion by 2030. Satellite services alone account for nearly 70% of the total market, underpinning everything from telecommunications and GPS to weather forecasting and global finance. As argued,[2] space is no longer a peripheral arena but rather an essential layer of the global economy’s “digital-industrial complex.”
Space is also becoming an increasingly contested domain. The emergence of dual-use satellite systems, the commercialization of low Earth orbit (LEO), and the development of lunar and cislunar resource extraction initiatives point to an escalating convergence of economic and military interests. This convergence is fueled by the expansion of space ambitions beyond Earth orbit, notably through NASA’s Artemis program and China’s proposed International Lunar Research Station (ILRS), signaling the dawn of a multipolar orbital order.
Academic literature has begun to capture this evolution by introducing the concept of “astropolitik” to highlight how geopolitical strategy increasingly hinges on orbital supremacy.[3] Similarly, the OECD[4] emphasizes the role of space as a multiplier of economic and developmental outcomes across sectors, particularly for climate resilience, transportation logistics, and digital connectivity. The implication is clear: space is not just a destination but a strategic domain with cascading implications for national security, economic competitiveness, and global governance.
For the United States and China, this means more than technological prestige. It marks a long-term bid for infrastructural dominance in the systems that will define economic life on Earth and beyond. For middle powers such as India, the United Arab Emirates, Japan, and Brazil, it presents a challenge and an opportunity: to position themselves as agile space actors capable of navigating an increasingly fragmented and competitive orbital environment.
This insight seeks to contribute to the debate by unpacking the strategic, economic, and governance dimensions of U.S.-China space rivalry, with a particular focus on its implications for middle powers and emerging space economies.
1. Competing Models: U.S. Private Dynamism vs. China’s State-Driven Strategy
The United States and China have developed sharply contrasting models of space engagement, each grounded in distinct political economies, institutional ecosystems, and strategic cultures. These differences are now fueling a systemic rivalry not only over orbital supremacy but also over the norms, alliances, and institutions that will govern the space economy.
The U.S. model is characterized by a blend of public-sector leadership and private-sector innovation. NASA remains at the core of American civil space exploration, but the rise of commercial actors such as SpaceX, Blue Origin, and Northrop Grumman has dramatically altered the speed, cost, and ambition of American space endeavors. SpaceX’s development of reusable rockets, satellite constellations (Starlink), and its role in NASA’s Artemis lunar program illustrate this hybrid model. The Artemis Accords, signed by over 35 nations as of 2025, aim to promote transparency, interoperability, and peaceful exploration, anchoring U.S. leadership within a broad coalition of like-minded states.[5]
By contrast, China’s space model is rooted in centralized state control, long-term planning, and integration with national development strategies. The China National Space Administration (CNSA) leads a vertically integrated space program, supported by state-owned enterprises such as the China Aerospace Science and Technology Corporation (CASC). China’s ambitions are expansive: the operational Tiangong space station, successful Chang’e lunar missions, the BeiDou global navigation system, and its planned Lunar South Pole base form part of a coherent strategy to achieve “space leadership by 2045.”[6], [7], [8]
China’s space activities are deeply intertwined with its foreign policy. The Belt and Road Space Information Corridor integrates satellite infrastructure with terrestrial BRI projects, offering bundled services in telecommunications, surveillance, and navigation to developing nations. This model exports China’s state-capitalist approach and creates new dependencies among recipient countries, some of which also become participants in China’s alternative governance frameworks, including the ILRS.[9], [10], [11]
The competition is thus not only about capabilities but also about competing visions for space governance. While the U.S. promotes an open, rules-based model centered on public-private partnerships and multilateral agreements, China advances a sovereign-centric framework emphasizing state control, non-interference, and technological self-reliance. These visions reflect broader ideological divides seen in global cyber governance, digital trade, and development finance.[12]
Academic observers[13] have characterized this divergence as a form of “astropolitical bifurcation” with potentially long-term consequences for interoperability, legal norms, and the peaceful use of space. As new entrants and middle powers develop their own space programs, the pressure to align with one bloc or the other may increase, especially in domains involving sensitive technologies such as satellite internet, launch vehicles, and lunar extraction.
Understanding these competing models is essential not only to forecast the trajectory of the U.S.-China rivalry but also to grasp how the space economy will evolve in a fragmented global order. For policy planners in Abu Dhabi and elsewhere, the choice is not binary but strategic: how to engage both systems, safeguard autonomy, and contribute meaningfully to a stable and inclusive space regime.
2. Space as Critical Infrastructure: Dual-Use Technologies and Commercial Militarization
The increasingly blurred line between commercial and military space capabilities is reshaping the very notion of infrastructure in the 21st century. Satellites that provide civilian services such as communications, navigation, and earth observation are often indistinguishable from those used for strategic military purposes. This dual-use dynamic is rapidly transforming space assets into critical infrastructure at the heart of national security policy.
Space has become a “strategic enabler” for terrestrial operations, with real-time satellite data integrated into military command systems.[14] The U.S. Space Force, created in 2019, underscores the institutionalization of this logic. It manages thousands of defense satellites, collaborates with private firms like SpaceX under defense contracts, and has established dedicated units for cybersecurity and satellite resilience.
China, for its part, has integrated its military and civilian space capabilities through the People’s Liberation Army Strategic Support Force (PLASSF). This integration allows seamless transfer of data, infrastructure, and personnel across China’s security and commercial sectors. This blurs lines not only between domains but also between war and peace.[15]
Moreover, both nations are investing in anti-satellite (ASAT) capabilities. China’s 2007 ASAT missile test and subsequent experiments with robotic satellite arms have prompted renewed U.S. investment in satellite hardening, in-orbit maneuverability, and resilience through megaconstellations like Starlink. RAND Corporation[16] emphasizes that such developments risk destabilizing the orbital commons, particularly in low Earth orbit (LEO), where traffic congestion and debris already threaten sustainable operations.
Scientific literature has echoed these concerns by using game theory to show that, absent enforceable norms, states have strong incentives to deploy dual-use systems and preemptively undermine adversaries’ space assets.[17] They argue for a new regulatory architecture that distinguishes between commercial and military use, while also setting enforceable rules for behavior in orbit.
The commercial implications are equally profound. Companies engaged in space services increasingly face geopolitical scrutiny and regulatory risks. For example, SpaceX’s Starlink constellation has been leveraged to support Ukrainian communications, drawing the ire of rival states. Likewise, China’s BeiDou system is embedded into the Belt and Road surveillance infrastructure, raising alarm among Western defense analysts.
As the dual-use paradigm becomes the norm rather than the exception, the role of regulatory oversight, international coordination, and transparent licensing becomes central to ensuring that space remains a domain for peaceful innovation rather than a theater of escalation.
3. Industrial Competition and the Emerging Cislunar Economy
Beyond Earth orbit, a new dimension of space competition is rapidly unfolding. The cislunar economy, i.e., the space between Earth and the Moon, is emerging as a key area for industrial development, resource extraction, and infrastructure deployment. The economic promise of this region lies in its potential for in-situ resource utilization, solar power generation, and the establishment of logistics hubs for deep space missions.
The United States and China have both prioritized lunar operations as strategic goals. NASA’s Artemis program aims not only to return humans to the Moon but also to build a permanent base near the lunar South Pole, where water ice and other critical resources have been detected. Similarly, China’s Chang’e missions, along with its proposed International Lunar Research Station (in partnership with Russia), reflect a long-term ambition to exploit lunar materials and support future Mars missions.
Scientific studies lend credibility to these ambitions and argue that extracting oxygen, water, and metals from lunar regolith could significantly reduce the cost of space operations by lowering launch mass requirements. They also identify the Moon as a “gateway” for sustainable economic expansion into deeper space.[18], [19], [20]
China has already outlined a timeline to deploy robotic mining infrastructure and lunar-based solar power stations by 2035. The U.S., in turn, has partnered with commercial firms under the Commercial Lunar Payload Services (CLPS) initiative, aiming to establish a modular and open-source ecosystem of lunar services.
This competition extends to asteroid mining. While still speculative, asteroid-based resource extraction is drawing significant venture capital interest, particularly from U.S.-based startups. China, meanwhile, has included asteroid exploration in its 14th Five-Year Plan for space, with missions targeting near-Earth objects for material sampling and return.
The cislunar race is thus shaping up to be the next arena of space industrialization, with both economic and strategic implications. The establishment of permanent infrastructure, whether in orbit, on the lunar surface, or at Earth-Moon Lagrange points, will define long-term dominance in space logistics, energy, and resource flows.
As these developments unfold, the importance of access rights, traffic management, and sustainable operations in the cislunar zone will become increasingly urgent. Current governance frameworks under the Outer Space Treaty[21] do not adequately address property rights, resource usage, or environmental protection beyond Earth orbit. The absence of legal clarity creates a high-stakes frontier where technological capabilities may outpace regulatory consensus.
For middle powers, engaging in the cislunar economy offers both a challenge and a strategic opening. Participation in lunar missions, development of resource-monitoring technologies, and collaboration on logistics infrastructure can provide early-mover advantages without requiring full-spectrum capabilities. But to do so effectively, these nations must help shape the governance norms that will define this next phase of space economics.
4. Fragmentation of Orbital Governance: The Risk of Parallel Regimes
As the space economy expands, governance frameworks are coming under strain. The 1967 Outer Space Treaty remains the foundational legal document for space activity, but it is increasingly seen as outdated in addressing modern realities such as private actors, resource extraction, and orbital traffic. In its place, two competing governance regimes are emerging, mirroring the geopolitical divide between the United States and China.
The United States has sought to modernize norms through the Artemis Accords, a non-binding agreement that promotes principles like transparency, peaceful use, and interoperability. Signed by over 35 nations, the Accords are designed to support NASA’s Artemis program and associated commercial partnerships. However, critics argue that the Accords advance a U.S.-centric vision of space law and sidestep consensus-based multilateral forums such as the UN Committee on the Peaceful Uses of Outer Space (COPUOS).
China and Russia have countered by promoting the International Lunar Research Station (ILRS), which includes its own set of guidelines and partners, many from the Global South. This bifurcation risks institutionalizing competing legal and operational norms; such fragmentation potentially undermines the long-standing norm of space as a global commons, particularly if disputes arise over lunar territory or resource access.[22]
Scientific literature supports these concerns and models orbital behavior using game theory, demonstrating that without mutual enforcement mechanisms, actors are likely to defect from shared agreements when incentives to monopolize orbital slots or resources increase.[23] Similarly, the European Space Policy Institute[24] warns that uncoordinated mega-constellations risk triggering a “tragedy of the orbital commons,” exacerbating space debris and raising collision risks.
Efforts to address these issues are underway. The UN has endorsed guidelines on the long-term sustainability of outer space activities, and regional dialogues are emerging. Yet enforcement remains weak, and the geopolitical climate is not conducive to sweeping multilateral reform. In this environment, middle powers have a critical role to play as bridge-builders and norm-shapers, advocating for inclusive, transparent, and enforceable governance standards.
5. The Position of Middle Powers: Strategic Non-Alignment and Sovereign Capacity
Amid the growing bifurcation of space governance and technological ecosystems, middle powers face both dilemmas and opportunities. For nations like India, the UAE, Japan, and Brazil, navigating between U.S.- and China-led frameworks requires a careful balance of strategic autonomy, technological investment, and diplomatic agility.
These middle powers offer a compelling case study. As a signatory of the Artemis Accords and a partner in NASA-led missions, Brazil, India, Japan and the UAE (among others) align themselves with open, rules-based governance. At the same time, they maintain diplomatic and commercial ties with China and Russia, engaging in satellite partnerships and Belt and Road space initiatives. This dual-track strategy enables access to diverse technology pools while avoiding overreliance on any single bloc.
Domestically, these middle powers have made substantial investments in sovereign capacity:
- The Emirates Mars Mission (Hope Probe), the Rashid lunar rover, and upcoming asteroid missions demonstrate a growing indigenous capability in mission design, systems integration, and planetary science. Institutions like the Mohammed Bin Rashid Space Centre (MBRSC) and the UAE Space Agency are also advancing research in Earth observation, data analytics, and AI-based satellite management.[25]
- India’s space program, led by the Indian Space Research Organisation (ISRO), has evolved from modest beginnings into a globally respected institution. The Chandrayaan-3 lunar mission, the Mars Orbiter Mission (Mangalyaan), and the upcoming Gaganyaan human spaceflight program reflect India’s growing expertise in planetary science, autonomous systems, and launch vehicle development. Under its Space Vision 2047, India aims to build a national space station by 2035 and establish lunar economic activity by 2040. Institutions like ISRO, IN-SPACe, and NewSpace India Ltd. are also fostering public-private partnerships and advancing satellite internet, reusable launch vehicles, and AI-driven orbital analytics.[26]
- Japan, via the Japan Aerospace Exploration Agency (JAXA), has developed a robust and diversified space portfolio. Missions such as Hayabusa2 (asteroid sample return), SLIM (Smart Lander for Investigating Moon), and the Lunar Polar Exploration Mission (LUPEX), in collaboration with India, showcase Japan’s strength in precision engineering and planetary robotics. JAXA also leads in Earth observation, disaster monitoring, and space debris mitigation, supported by a strong industrial base and a strategic alliance with the United States. Japan’s Basic Space Law and its Space Strategy Fund reflect a long-term commitment to technological autonomy and international leadership.[27]
- Brazil, through the Agência Espacial Brasileira (AEB), has steadily built sovereign capacity in launch systems, satellite development, and regional cooperation. The Alcântara Launch Center, located near the equator, offers strategic advantages for orbital deployment. Brazil has launched indigenous rockets like the VSB-30 and is developing the VLM (Microsatellite Launch Vehicle) in partnership with Germany. The country also signed the Artemis Accords in 2021, signaling its intent to participate in lunar exploration. Institutions like INPE and ITA support research in geodesy, meteorology, and aerospace engineering, while Brazil’s involvement in BRICS space initiatives enhances its diplomatic and technological reach.[28]
For these nations, the challenge lies in sustaining long-term investment, cultivating a skilled workforce, and aligning regulatory standards with international best practices. But the payoff is significant: the ability to influence the rules of space engagement, attract investment, and integrate space into broader national development goals.[29]
Academic research highlights how middle powers can leverage space to enhance regional influence and technological self-reliance, and argues that these countries can serve as norm brokers, using their credibility and neutrality to shape emerging governance structures.[30]
6. Strategic Implications for Middle Powers and the Global South
The growing centrality of space in economic and geopolitical strategy has clear implications for the middle powers and the wider Global South. As access to space becomes more contested, the ability to shape the rules of the game, and not just participate in it, will define which countries emerge as influential players.
For these middle powers, this means investing not only in hardware but also in institutions, alliances, and intellectual leadership. Space should be viewed as a strategic infrastructure domain on par with energy, ports, and digital systems. Growing leadership in climate diplomacy also offers a platform to align orbital activities with environmental and resilience goals.
Regionally, these middle powers can lead efforts to coordinate space strategies, promoting joint missions, data sharing, and regulatory harmonization. Through initiatives developed by themselves, it can foster a collective voice for those regions in global forums.
More broadly, these middle powers can champion inclusive governance by creating platforms where emerging space actors, academic institutions, and private firms engage in open dialogue on norms, sustainability, and equity. As the global governance system fragments, this role becomes increasingly vital.
Conclusion
The intensifying competition between the United States and China is rapidly transforming outer space from a peripheral scientific domain into a central arena of geopolitical and economic rivalry. From the deployment of satellite constellations in low Earth orbit to the planned establishment of lunar infrastructure, this contest extends across physical, technological, and ideological dimensions. It is not merely a race for prestige or technological primacy; it reflects divergent models of governance, industrial policy, and international engagement. As space becomes a strategic enabler of terrestrial systems, control over orbital and cislunar infrastructure will increasingly shape global supply chains, military readiness, and digital connectivity.
Yet despite the rivalrous dynamics at play, space remains one of the few domains where cooperation can, and must, persist. Shared challenges such as orbital congestion, space debris, and the need for responsible resource extraction underscore the necessity of multilateralism and transparent governance. Without coordinated frameworks and mutual restraint, the risk of escalation, fragmentation, and normative breakdown will only grow.
For middle powers such as India, the UAE, Japan, and Brazil, this evolving environment offers more than participation; it presents a generational opportunity for leadership. By investing in sovereign capabilities, championing inclusive governance models, and serving as diplomatic intermediaries between competing blocs, countries like these middle powers can help shape the rules of the orbital economy while advancing their own strategic interests. The development of a domestic space sector, coupled with regional collaboration and academic innovation, can further position such actors as credible contributors to global space governance.
As the space economy accelerates toward trillion-dollar scale, the challenge is clear: to transform space from a contested frontier into a shared infrastructure for sustainable progress. Strategic foresight, institutional innovation, and principled engagement will determine whether the orbital commons becomes a theater of division or a platform for cooperation, development, and peace.
[1] Space Foundation, Global Space Economy Report, 2023, Available at: https://www.spacefoundation.org/wp-content/uploads/2024/03/SpaceFoundation_2023-Annual-Final-Web.pdf.
[2] Andrew Ross Wilson and Massimiliano Vasile, “The Space sustainability paradox,” Journal of Cleaner Production 423 (2023): 138869.
[3] Everett C. Dolman, Astropolitik: Classical Geopolitics in the Space Age (Strategy and History), Routledge, 1st Edition, 2001.
[4] A new lanscape for space applications, OECD Publishing, 2022, https://www.oecd.org/content/dam/oecd/en/publications/reports/2022/11/a-new-landscape-for-space-applications_e2209f9a/866856be-en.pdf.
[5] Francisco Del Canto Viterale, “Global Governance of the Space System: A Multilevel Governance Analysis,” Systems 12, no. 9 (2024): 318, https://doi.org/10.3390/systems12090318.
[6] Zhihui Zhang, “Space Science in China: A Historical Perspective on Chinese Policy 1957–2020 and Policy Implication,” Space Policy 58, no. 9 (2021): 101449.
[7] Francisco Del Canto Viterale, “Global Governance of the Space System: A Multilevel Governance Analysis.”
[8] Madhav Aiyer, Space Diplomacy: Governance and Cooperation in the Emerging Space Economy, Working paper, 2025.
[9] Duan, K., Belt and road Space Information Corridor: opportunities and challenges from legal perspectives, DigitalLibrary, Paper ID 46320, 2018.
[10] Kuang-Ho Yeh and Ni Guihua, “China-Pakistan Space Cooperation: Path, Motivation and the Future,” Contemporary Eurasia 12, no. 1 (2023): 26-50.
[11] Laura Cashman and Sarah Liebermann, “Space Diplomacy and the International Space Station,” European Review of International Studies 10, no. 3 (2023): 276-302.
[12] Tarun Chhabra, Rush Doshi, Ryan Hass, and Emilie Kimball, “Global China: Regional influence and strategy,” Brookings Paper series, 2020.
[13] Fatoumata Diallo, “China’s Military-Civil Fusion in Space: Strategic Transformations and Implications for Europe,” Institute for Security and Development Policy (ISDP), July 2025.
[14] Zachary Burdette, “The U.S.-China Military Balance in Space,” International Security 49, no. 4 (2025): 71–118.
[15] Fatoumata Diallo, “China’s Military-Civil Fusion in Space: Strategic Transformations and Implications for Europe.”
[16] Bruce McClintock, Douglas C. Ligor, Dan McCormick, Marissa Herron, Kotryna Jukneviciute, Thomas Van Bibber, Katie Feistel, Akhil Rao, Adi Rao, Taylor Grosso, et al., The Time for International Space Traffic Management is Now, RAND Corporation (2023): Available at: https://www.rand.org/pubs/research_briefs/RBA1949-1.html.
[17] Aditya Jain and Akhil Rao, “International cooperation and competition in orbit-use management,” arXiv preprint arXiv:2205.03926, 2022.
[18] Alex Ellery, “Sustainable in-situ resource utilization on the Moon,” Planetary and Space Science 184 (2020): 104870.
[19] Philip T. Metzger, “Economics of in-space industry and competitiveness of lunar-derived rocket propellant,” Acta Astronautica 207 (2023): 405-444.
[20] Kevin Barry, “Evaluation of the Economics Around Space Resource Extraction and In-Situ Resource Utilization (ISRU),” International Astronautical Congress 2024, Milan, Italy, 2024.
[21] United Nations Office for Outer Space Affairs, Outer Space Treaty (1966),
https://www.unoosa.org/oosa/en/ourwork/spacelaw/treaties/introouterspacetreaty.html.
[22] Lucillien Denoyelle, “The Legal Moonscape: Navigating the Legal and Sustainability Challenges of Lunar Mining and Settlement,” Space Market Dynamics 1, no. 1 (2025): 29-36.
[23] Aditya Jain and Akhil Rao, “International cooperation and competition in orbit-use management,” arXiv preprint arXiv:2205.03926, 2022.
[24] “Space Environment Capacity,” European Space Policy Institute 2022, https://www.espi.or.at/reports/space-environment-capacity/.
[25] UAE Space Agency, “Emirates Mars Mission – Hope Probe,” 2025, https://space.gov.ae/en/about-us/initiatives-and-projects/initiatives-and-projects-listing/emirates-mars-mission-hope-probe.
[26] Department of Space, “Parliament question: efforts to make India a developed nation by 2047 in space sector,” 2024, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2083766.
[27] Japan Aerospace Exploration Agency, “About Asteroid Explorer “Hayabusa2,”” 2025, https://global.jaxa.jp/projects/sas/hayabusa2/.
[28] The Brazilian Space Agency, “Overview of Brazil’s space resources plans, activities, and interests,” 2024,
[29] Dan Banik and Emma Mawdsley, “South–South Cooperation and global development in a multipolar world: China and India in Africa,” Journal of International Development 35, no. 4, 2023.
[30] Adam Krzymowski, “Economic Diversification of the United Arab Emirates through the Space Sector and Its Diplomacy,” Virtual Economics 7, no. 4 (2024): 30-47.
