Starship enterprise goes boldly in search of profit

Farmer turned taxi driver Liu Fugen knew that sooner or later his land in Tianjin would make way for construction, but he had no idea a Long March rocket would be built on his rice paddies. 'Rockets are a national wonder, so sacred and mysterious, in my mind. I could not imagine they would one day come out of the Gobi Desert and be put together in a big city like Tianjin,' Mr Liu said. By 2011, a rocket assembly plant the size of five Tiananmen Squares will be built in the harbour city, producing what state media describe as the next generation of transport vehicles, powerful enough to send the first Chinese explorer to Mars. The Tianjin operation is only part of an ambitious plan unveiled this year by the China Aerospace Science and Technology Corporation (CASC), the flagship of the Chinese space industry whose aim is to rival Boeing, Lockheed Martin, Raytheon and Rolls-Royce. It may sound ambitious for a company whose profits last year amounted to just 5 billion yuan (HK$5.71 billion), less than Boeing made from selling tail wings for rockets and missiles. But CASC, the third biggest state-owned enterprise on the mainland with 130 billion yuan in assets, plans to achieve that by 2015 - although its president, Ma Xingrui , is not disclosing details about how the corporation plans to meet that target. 'We prefer to remain silent while working as hard as we can,' Dr Ma said. A space industry source close to Dr Ma said the 49-year-old never gave interviews or accepted invitations to play golf, or took vacations. He has continued to publish in academic journals since taking the helm from Zhang Qingwei last year, with his latest paper looking at mathematical modelling of liquid fuel. But the source said the low-key academic has shown signs of shaking up the status quo by changing some senior staff, as well as the structure of the management hierarchy. 'The space industry is too big, too old and too sensitive to swallow any reform easily,' the source said, making a comparison between the industry and an elderly person. 'Even a spoonful remedy to the existing regime would inevitably hurt the guts of some reputable figures who may have been hanging around before China sent its first satellite into space in 1970. 'Though the space industry seems to have turned up the most advanced scientific and technological work on the mainland, the core management philosophy is not much different from a handicraft workshop where masters personally pass on the knowledge and skill, as well as power and influence, to their apprentices.' But as China deepens its economic reforms and political leaders push for rapid expansion of the programme, the corporation will need to develop a modern management hierarchy, with co-ordinated research and planning to encourage efficiency and innovation. The space industry source said China had learned from the experience of the Soviet Union that real competition was not just in science and technology, but in industrial and economic strength. Dr Ma's strategy is to expand the business side of the space programme into a profitable enterprise. 'The plan is brave, but the guy knows what he is doing,' the source said. According to the abridged public CASC plan, Tianjin was chosen for the plant to complement another space facility, twice as large, under construction in Hainan . Hainan is China's closest province to the equator, and launching spacecraft there can cut the amount of fuel needed to keep modules aloft. Hainan will gradually take over from Jiuquan in Gansu to assume many of the launch tasks, but because Hainan is an island, modules must be shipped in. Tianjin, by contrast, has deepwater harbours suitable for shipping in rockets. In Hainan, plans are afoot to incorporate a space theme park, a residential development and 'business recreational' compound. A new space centre in Inner Mongolia will supply solar panels for spaceships. But most production would be devoted to civilian alternative-energy equipment. The Inner Mongolia facility is also planning an unconventional but potentially lucrative business in 'space enzymes'. After continuously exposing germ-filled test tubes to space radiation for decades, biologists have harvested a large pool of transformed germs that could produce special enzymes for the pharmaceutical, cosmetics and food industries. Inner Mongolia was chosen as the business could pose environmental risks. The initial investment in the enzyme plant is 5 billion yuan, and annual revenue is expected to exceed 10 billion yuan in a few years. CASC hopes to reap another 10 billion yuan from a fourth new base in Shenzhen and Hong Kong specialising in satellite communications and financial services. The four new bases will complement existing bases in Beijing, Shanghai, Xi'an and Chengdu that produce civilian products. The company also plans to invest in trust funds, banks and even its own investment bank, building on its strength as one of the mainland's biggest recipients of state funding.