China Space Official Confounded By SpaceX Price

hackingbear writes "Declining to speak for attribution, the Chinese officials from Great Wall Industry, a marketing arm of China Aerospace Science and Technology Corp. (CAST), say they find the published prices on the SpaceX website very low for the services offered, and concede they could not match them with the Long March series of launch vehicles even if it were possible for them to launch satellites with U.S. components in them. According to the SpaceX website, launch on a Falcon 9 — which has an advertised lift capacity of 10,450 kg. (23,000 lb.) — from Cape Canaveral costs $54 million — $59.5 million. If the SpaceX price is real and its quality is proven, both are big IFs, it is remarkable to see that US can beat China in term of price. Between August 1996 and August 2009, the Chinese rockets have achieved 75 consecutive successful launches were conducted, ending with a partial failure in the launch of Palapa-D on August 31, 2009. If we all learn from SpaceX, maybe soon China will outsource from the US."

Comments

Reverse outsourcing? No.

[macraig]

... maybe soon China will outsource from the US.

No, they won't. They'll do the same thing they've been doing for generations now: they'll study what we're doing (e.g. SpaceX), both legally and not-legally, copy it at first like a baby learning a new language, then learn how to integrate what they learn into their own way of doing things, and finally wind up doing it better or at least more cheaply than we can.

Comparitive Advantage

[Stormy Dragon]

China's big advantage is cheap unskilled labor.

Space rockets aren't produced in big enough batches to mass produce and generally require a lot of skilled labor. Exactly the sort of product where the US tends to have an advantage.

Re:Comparitive Advantage

[0123456]

Space rockets aren't produced in big enough batches to mass produce and generally require a lot of skilled labor. Exactly the sort of product where the US tends to have an advantage.

Yet the reason why SpaceX believe they can get the costs down to a tenth of the competition is precisely because they plan to mass-produce their rocket components (e.g. three first stages with the same basic design and nine of the same engines on each stage).

Re:Comparitive Advantage

[bmo]

>China's big advantage is cheap unskilled labor.

That's changing, though, in case you haven't noticed. They've targeted aerospace. Sure, they're not competitive *now* but do you seriously think that's going stay that way?

The US automakers thought the same thing in the 60s, 70s, and 80s.

--
BMO

Re:Comparitive Advantage

[Stormy Dragon]

That is, by and large, what the US does do. Contrary to general impression, US manufacturing continues to increase (in deed, according to the UN Industrial Development Org, the US accounts for 21% of the planet's manufacturing). In 2006, our country produced more than it ever had before. Since then it's fallen off a bit, but due to the recession, not outsourcing.

Now yes, manufacturing JOBS continue to decrease. But the reality is that it's not because jobs are going overseas; it's because they're disappering entirely. Much like agriculture at one time took a large part of society's labor and then shifted to something that only required a few percent, we are going through a similar shift where a few percent of the population is capable of manufacturing everything.

Re:Comparitive Advantage

[jd]

It's not enough to focus on skilled tasks. They need to be skilled tasks that the mindset is well-adapted for. Britain's penchant for risk-taking is why it is a key R&D center for not only Formula 1 but Indycar as well. America is risk-averse, which is why it has outsourced a lot of the low-profit, high-investment research (nuclear fusion, supercolliders, etc) to other nations. A lot of the R&D in America is high-profit (such as medical work, advanced microelectronics, etc) and requires relatively little investment once the research facility has been put together. Silicon Valley would never have survived otherwise, given the enormous cost of constructing some of those facilities.

Monocultures are a Bad Idea (Michigan can help explain that one rather better than it would like) but there's nothing wrong with optimizing to your strengths. Indeed, it seems very likely that if America stopped trying to compete where it is weak and started competing where it is strong, it would not run into so many problems. The same goes for the EU and everyone else. Diverting money to lost causes only achieves inferior progress everywhere else.

Of course, you have to be a bit careful with federating technologies. Although a federation is nominally superior to over-generalized societies, it is open to abuse. America doesn't produce its own Rare Earths, but depends utterly on China for them. Not because of any scaricity in America, more for convenience. That turned out to be an incorrect path. Politics now utterly controls the availability of critical elements, which is utterly wrong. You've got to have some balance in there.

Unfortunately, balanced thinking is something corporations (and people in general) are rather bad at.

Re:Comparitive Advantage

[ugen]

I think "mass production" in terms of rockets means "a dozen". It's the kind of "mass production" where China has little to offer.

Re:Comparitive Advantage

[Spy Handler]

well, we do have a civilization, both there and there. We have things like business agreements and government obligations. So short of something drastic, like an all-out war between US and China or the US gov't declaring bankruptcy, those pieces of paper obligations must be met. And they *will* be met. Which means we owe China a shitload of money, while they send us all the crap we buy in Wal*Mart.

Re:Comparitive Advantage

[0123456]

I think "mass production" in terms of rockets means "a dozen". It's the kind of "mass production" where China has little to offer.

SpaceX are talking about manufacturing 400 engines per year; there aren't many rocket booster engines that have been produced in three digit numbers, let alone that many per year.

I believe a single Falcon Heavy launch would have more engines on it than all the SSMEs ever built, for example.

Re:Comparitive Advantage

[0123456]

Because these vehicles are one shot use, as opposed to an airplane, there is a definite limit as to how much product can be offered.

But if they were reusable like an aircraft they'd probably only have to build one.

I agree that, the market isn't there right now because the primary market for space launches is comsats who don't care that much about launch costs (saving $100,000,000 would be nice, but it's not going to double the number of billion-dollar satellites). SpaceX appear to be hoping that by dramatically cutting launch costs they can increase the market to compensate.

Re:Comparitive Advantage

[goodmanj]

Exactly. The way you mass-produce rockets is with high-precision CNC machining and minimizing human hand-work. More robots, less people. This is what US manufacturing is good at -- and if you've seen SpaceX's video tours of the inside of their shop, you've seen how CNC-focused they are.

Re:Comparitive Advantage

[trout007]

SpaceX is working on recovering both stages. Elon has said so many times that if they need to do it in the long run. It will be a gradual process and isn't required for mission success short term.

What is interesting is that SpaceX is a new company but their employees have loads of experience. They basically cherry picked the most talented people and lured them in by letting them build things instead of sit in meetings. Most technical people would rather work than goof off. But in the big companies there is a lot of meeting and large groups that make everything cost so much. SpaceX does away with this and just has the people they need to get the work done. Image if you could get rid of all the people at your company that really don't contribute and how much money you would save?

Don't worry

[Kjella]

If SpaceX truly is better they'll just use the Chinese 3 step program:

The first ones, you build them and we launch them (teach us to use it)
The next ones, we build under your supervision (teach us to build it)
The final ones, we build ourselves on license (assuring completeness)

After that a remarkably similar Chinese rocket will replace the US one, naturally not paying any foreign royalties. Most everybody involved will care about their own quarterly bonus and will jump ship by then. Did I miss anything? There's no ??? step in this, but tben again it's not a slashdot plan...

Re:Reverse outsourcing? No.

[MrEricSir]

China: if Microsoft was a country.

Re:temporary at best

[0123456]

If necessary, they can just "duplicate" the IP, or require tech transfers to Chinese companies similar to how they are doing in commercial aviation.

And, uh, why would SpaceX give their technology to China? Particularly when it would probably be illegal to do so under ITAR.

Obvious Possibility...

[brit74]

Maybe SpaceX is low-balling their cost estimates.

It's also worth pointing out that their pricing has changed over time:

Current webpage: (http://www.spacex.com/falcon9.php)

"Price* $54M - $59.5M *Standard launch prices for 2013"

Their webpage on Jan 2, 2010: (http://replay.waybackmachine.org/20100102224858/http://spacex.com/falcon9.php)

Pricing:
SpaceX offers open and fixed pricing that is the same for all customers, including a best price guarantee. Modest discounts are available for contractually committed, multi-launch purchases. A half bay flight of Falcon 9 is available to accommodate customers with payloads in between Falcon 1 and 9.
Mission Type Price*
LEO (s/c < 80% capacity) $44M
LEO (s/c > 80% capacity) $49.5M
GTO (s/c < 3,000 kg)** $44M
GTO $49.5M

*Standard Launch Services Pricing through 12/31/09.

Re:Obvious Possibility...

[phantomcircuit]

Inflation has been significantly more than 10% for the main component of the price, fuel.

Re:Obvious Possibility...

[mijelh]

They use RP-1 (refined petroleum), for which inflation, as you know, has been more than 10% last year

Re:Please proof read. Typos happen so easily.

[digitig]

Word-by-word it's fine. It's only when you put the words together in order that there's a problem.

Prices will rise as fast as the rockets.

[Usually Unlucky]

The Space Shuttle
The Delta series
The Atlas Series
The Araine series

They were all touted early on as being very inexpensive, prices ended up increasing much faster than inflation.

Of course those were all designed in the 70s, we shall see what the present brings

Re:Prices will rise as fast as the rockets.

[Teancum]

http://www.spacex.com/launch_manifest.php

That isn't just government contracts, and those are people who have signed, put money down, and have formally become a "customer" for SpaceX. They've sold quite a few contracts, and the list on this particular web page seems to keep getting longer and longer as I watch it.

SpaceX is already turning a profit, so I'd dare say that they can certainly remain profitable for the next five years, if not much longer. About the only thing that would stink and change this is if LA became ground zero in a nuclear war, but the future of SpaceX would hardly be a pressing issue at that point.

Perhaps, and I'll leave this as an open question, SpaceX might have a series of failures where the quality of their rockets will go downhill, and thus lose customers and have nobody else signing up. That isn't a lack of customers, however, that is the problem.

Re:temporary at best

[0123456]

Who said anything about it being voluntary?

You mean other than the part about "require tech transfers to Chinese companies"?

Orbital Inclination + no equator access = money

[gavron]

This is a common difference between countries that have equatorial regions and none. The US can launch its spacecraft from Florida (or in the alternative Edwards AFB). This allows them to reach the right inclination with LESS energy (delta-V, fuel, money, take your pic). Good explanation at http://www.orbiterwiki.org/wiki/Launch_Azimuth.

This is why the Space Shuttle could not simultaneously reach both the International Space Station AND the Hubble Space Telescope. To put it simply, the two were in such different inclinations (think "how do I tilt an orbit wheel over the earth, right, left, flat...") that the shuttle could only reach one or the other.

SpaceX launching from the US or central America will ALWAYS have to expend significantly less fuel than launches from China.

Inclination. It's a big word, but it means $$$.

Ehud
Tucson AZ

Re:Orbital Inclination + no equator access = money

[Rakishi]

You've never looked at a map of China have you? Hint: it's not further north than the US.

The in progress Wenchang Satellite Launch Center is in fact further south than Cape Canaveral by a decent amount. Xichang Satellite Launch Center is at roughly the same latitude as Cape Canaveral . That said, historically China has built it's launch facilities deep inside the country which puts them further north but also away from prying eyes. Which is likely a politically motivated limitation rather than any geographic or technical limitation.

Re:Orbital Inclination + no equator access = money

[wagnerrp]

Cape Canaveral is at roughly 28.5 degrees. The Chinese have satellite launch facilities at Jiuquan (39 deg), Taiyuan (38 deg), Xichang (28 deg), and Wenchang on their southern island at only 19.5 degrees. The equator is 40Mm around, so initial speed at the equator would be around 0.46km/s. At 19.5, you have 0.43km/s; 28 is 0.41km/s; 38 is .36km/s.

Now what does all this mean? Low Earth orbit is around 8km/s, plus another 2.5km/s in altitude. That means there's all of a whopping 1% difference in delta-V between an equatorial launch, and one from China's northern launch facilities. Now true, fuel budgets run on exponential functions, and a 1% increase in velocity results in a more than 1% increase in fuel and cost, but it's not going to be the determining factor whether a launch system succeeded or fails.

Orbital plane changes are a completely different matter. The shuttle only has storage room to carry with it enough fuel for a couple degrees difference in plane, but that's because you're traveling 8km/s. It's not like you're in a car or a plane, and can push off something while maintaining your momentum. It all has to be done with thrust, and you have to reduce velocity in one direction, and increase it in another. When you're going a mere 0.4km/s starting from the ground, you only have to add velocity to get where you want to go. That means it is actually more efficient to land and take off again if you want to transition between equatorial and polar orbits.

Re:Reverse outsourcing? No.

[meza]

And how much has that hurt you? Are you without a job? In that case, would you have a job if Japan didn't exist? Did development in the US stop because of Japan, or is there other research still going on? Would the Prius have been built in the US if Japan didn't exist? Just curious on the reasoning.

I fail to see how loosing positions in ranking has any thing to do with that if life actually gets better for everyone. I'm not saying that is the case, just that it is an equally valid explanation.

Re:Reverse outsourcing? No.

[jd]

Pfffft. As if America hadn't done the same. America, prior to signing onto international treaties on copyright and patents, was notorious for reverse-engineering European products and then using mass-production (as opposed to specialist workshops) to undercut the Europeans and sell back to them. Indeed, most major nations throughout history have been... loose on morals and ethics in their formative years. The Romans stole all their technologies - and usually stole the countries that invented them too. The only "we" in this equation is humanity, since every nation on Earth that made it big did so on the back of other nations, robbing them at first, then exploiting them later. The usual end result is an addiction to those other nations, resulting in the inevitable death from that addiction.

(This is why I would like to see a nation actually acheve something honestly for a change. If there isn't that addictive quality, if using others isn't the drug of choice, then you might actually get stable, sustainable achievement. Might. Without any actual case studies to examine, this is a difficult theory to test.)

Old soviet jokes

[Palal]

Old Soviet Jokes about the Chinese Space Program: 1. There is a knock on the door in the MIR space station. The cosmonauts open the door and see a Chinese guy. They ask him: "How did you get here". He responds: "Simple you see. We built a human pyramid" 2. TV Bulletin: "Yesterday, the Chinese launched their first satellite into space. During the launch, 2.45 million Chinese suffered a hernia."

Re:Reverse outsourcing? No.

[rAiNsT0rm]

You will see soon enough how much damage it truly has done. As a long-time investor, researcher, and currently in charge of a large global voice and data network for a global corp, I see it first-hand. A lot of research and many great books have been written on this topic, you should check some out and then see if your opinion holds. Japan as Number One, China Inc., and anything on the topic of BRIC are decent starting points in normal prose.

My personal opinion is that we are heading for a large fall and one that we will not quickly or easily climb out of. My best guess is that in 3-5 years China and BRIC (as well as allies they bring in as they get closer to #1) will start to flex their muscle, you can see the framework in place now. I am also guessing the quickest we could begin to recover will be 10-15 years, with 20 seeming not out of the question. Positions/rankings may not be important to you but they mean quite a lot in terms of resources and where they go, and many of the countries with the resources will go where the growth and numbers are... which is not the US, a number of those ties are already strained or deteriorating. Again, this is my opinion, but it is based on a lot of information. No one has a crystal ball, but I would be very shocked if I'm completely wrong.

Re:Reverse outsourcing? No.

[rAiNsT0rm]

I'm in solid agreement with you mostly, but there is a difference. Greed. Not just greed but artificial constructs such as the current stock market. Many European companies have endured and lasted perfectly fine on stability and flat/zero growth or very low percentages. And there is nothing wrong with that, but many US companies force massive, unsustainable, double digit growth in the name of stock prices and lining executive pockets and once they are run into the ground or fail spectacularly those execs simply move on to another company to rape. This has left many American businesses extremely weak and badly broken which is something that is a much deeper and serious. I think the US can and could innovate again, but first the infrastructure would need to be rebuilt and the desire to do so which we currently lack.

I actually don't care about patents and "secrets" as they are of marginal value anyhow in the grand scheme of things, it ultimately comes down to sustainability and the product. Every culture has gotten too big for it's britches at some point and most go supernova as a result, innovation be damned.

Re:Reverse outsourcing? No.

[im_thatoneguy]

Except that Microsoft spends more on R&D than most other companies combined and often enters markets long before anyone else. (See Smart Phone, MP3 Players, Tablets etc...)

Re:Reverse outsourcing? No.

[goodmanj]

Whoever modded this post "flamebait" should look up the history of Samuel Slater, Francis Cabot Lowell, and others. America lagged far behind Britain at the end of the 18th century, but soon reached parity through a combination of technology purchase and straight up industrial espionage.

Re:Reverse outsourcing? No.

[paiute]

Except that Microsoft spends more on R&D than most other companies combined and often enters markets long before anyone else. (See Smart Phone, MP3 Players, Tablets etc...)

Black powder, printing, noodles.

Re:Reverse outsourcing? No.

[Wyatt Earp]

The problem with that is, no modern technologies the Chinese have copied are "better" than the original. Their APC, tank and aviation products which are copies of Soviet, Russian and western designs are never better than the originals.

Their attempts at doing it themselves with their attack submarines, boomers, ICBMs and carriers have been costly and often out of service.

Re:Reverse outsourcing? No.

[rAiNsT0rm]

Have a look at the long-selling book "Japan as Number One" well over 30 years since it was published it is still a top seller and extremely highly rated. Also realize that Japan has the most, oldest, businesses still in operation.

Re:temporary at best

[Nyeerrmm]

Except that SpaceX's advantage isn't their technology. They are standing on the so-called shoulders of giants for their technology.

The innovations that allow them to be cheap are their business and industrial practices. Part of that is being private and having an owner who, while not wanting to lose money, is focused on goals beyond the next quarterly report. Another is being a small company that can pick the best of the best of young unmarried engineers who are salaried and believe enough in the vision of the company to work 80 hours/week with no extra pay. A third part of that is the vertical integration that helps them avoid a lot of the costs inherent to other US suppliers. I'm sure a business person could list a few more, but as an engineer I'm not the most adept in these things.

These are things that can be gleaned from open sources or just talking to a few of their employees. There is little technology to steal, and that that there is could be developed pretty easily. SpaceX's advantage are things that relate to the business environment, the political environment, and the social environment, and won't necessarily translate directly to the Chinese situation.

Re:Chinese lying?

[PopeRatzo]

Kinda like how icelandic government promised to pay back its loans but then the voters, who the government serves, decided to flip their creditors the bird instead?

They had "the bird" coming.

Re:Reverse outsourcing? No.

[jd]

Ok, I can buy your argument on greed and artificial constructs. As for your .sig, the Brits used espionage to steal tea secrets from the Chinese. As I said, all nations have used theft to get ahead. (For those interested in the history of tea, the Brits used to drink coffee. They switched to tea to protest government efforts to shut down the trade unions and other "unapproved" organizations. America switching to coffee as a protest against essentially the same government for essentially the same practices is one of history's greatest ironies.)

Re:Chinese lying?

[Rei]

I don't see what's so shocking about those numbers. Just under $6k per kilo? The cheapest US and European launch systems have long gotten $10k per kilo. What's so shocking about a 40% reduction in price per kilo from a totally new launch stack that makes use of "lessons learned"? And Russia's regular prices hover around $7k per kilo, with "specials" at $5k per kilo or less. China should be embarrassed that with their cheap labor costs, they can't do any better than $6k per kilo. They won't just be ceding the market to the US, but to India, too.

Re:Reverse outsourcing? No.

[SplashMyBandit]

China had a technological lead a long time ago, in the technologies you mention. With the Age of Enlightenment (decreased religious and political control of learning and thought), the printing press, and personal freedoms the West/Russia/Middle East leapt ahead. So, while you mention black powder, (block) printing, noodles, which are all great inventions you are choosing to selectively ignore the mammoth changes the West developed since. For example: free speech, modern printing press, mass literacy, railways, steam/coal/hydro/wind/nuclear power, true understanding of electricity and electromagnetism, true understanding of chemistry, true understanding of much of physics, electromagnetic communication, flight, blah blah blah blah blah. Sure the Chinese were by no means primitive, but you are also missing the elephant in the room when you mention their historic contributions. Hopefully they'll also contribute again meaningfully in the future, instead of just copying and refining ideas as they are doing know. That said, I still personally would not like to be a Chinese citizen living in China, hopefully individuals will have more meaningful existences there too.

Re:China Outsource to USA?

[dbIII]

Destroy? No, they need the west to buy their stuff. That's why they never did anything serious about Taiwan even when China was at their most militant with a batshit insane leader.
You are talking about an imaginary China from the lies of guys that want to do nothing but sell enough weapons win a war with China six times over.

Re:Reverse outsourcing? No.

[Teancum]

China might be able to copy the blueprints, but they don't have the skilled workers (SpaceX has raided the workforce of several long-time aerospace companies, including Boeing, Lockheed-Martin, and others), the industrial infrastructure (the SpaceX factory is a former Boeing plant that made 747s), and far and away more important:

The competitive drive coming from running Silicon Valley start ups that deliberately cuts out bureaucracy and hates hierarchical organizations as only a necessary evil. The People's Liberation Army is not going to reverse-engineer SpaceX without them becoming essentially a "liberal" democratic society that respects human rights and permits freedom of speech, thoughts, and actions.

China wants central planning and control. That works fine for some projects, and is the way that NASA has been running things for decades. It is also the source of problems for NASA and why nothing new seems to be coming from JSC or for that matter any other NASA center that actually makes it into the skies.

What keeps SpaceX on their toes isn't the major "traditional spaceflight" companies like Boeing and Lockheed-Martin, it is the dozens or more start-ups that can all easily take their place as the darling new aerospace company, some of which are doing things even more efficient and perhaps better than SpaceX. There isn't anything special about this one company, other than they have a sugar daddy who had some money (now spent mostly) to get them going in the first place. Remember where Elon Musk got his start, and that explains quite a bit about how he is running his companies too.

Re:PRICE

[WindBourne]

I really want to take exception to this, but I can not. Sadly, you are right on the money, with one little issue. China is in a cold war with the west. They intended to destroy America, followed by EU, than Canada. They hope to pull Australia, Japan, South Korea, and even India into their sphere.

Re:Chinese lying?

[Anonymous Coward]

Well, iceland has deposit insurance, so the government guarantees you get (part of) your money back when a bank goes bankrupt. What's more, the icelandic government nationalized Landsbanki, and it went bankrupt after that.

So, there were guarantees, and it wasn't a private bank anymore.

From wikipedia: the government also guaranteed "that deposits in domestic commercial and savings banks and their branches in Iceland will be fully covered"

Re:Reverse outsourcing? No.

[GameboyRMH]

But they never used it for military purposes.

LOLWUT?

http://en.wikipedia.org/wiki/Gunpowder#China

http://en.wikipedia.org/wiki/History_of_gunpowder#Development_in_China

http://www.environmentalgraffiti.com/sciencetech/earliest-gunpowder-weapons-history/19198