As the growing tensions between America and Communist China play out not on the battlefield, but amongst the stars, Washington is finding one of its greatest assets lies in the ambitions of one man and his space company — Elon Musk. Yet America’s prowess beyond Earth’s surface could yet depend on whether state regulators in California allow SpaceX to innovate.

Not since 1954, when Willie Mays made what historians call “The Catch,” has there been such a sensation as SpaceX snagging its 40-story spacecraft known as the Super Heavy-Starship in its giant mechanical arms. This was only the fifth flight test of the world’s largest and most powerful rocket.

By demonstrating rocket reusability, the launch marked an unprecedented feat of engineering and a giant leap forward in Mr. Musk’s quest to bring humans to Mars.  Yet only a couple days after that mesmerizing catch, SpaceX sued a California agency in federal court for engaging in what it describes as “naked political discrimination.”

At issue was California’s decision rejecting SpaceX’s plan to increase the number of rockets it launches from Vandenberg Space Force to 50 from 36 a year. Members of the California Coastal Commission have for months been airing concerns about the impact of the rocket launches and sonic booms on the region’s wildlife, but they also cited unrelated reasons for blocking the plan — Mr. Musk’s political influence, his posts on X, and his company’s labor record.

“Elon Musk’s political activities are probably the greatest risk factor for SpaceX’s ongoing success,” a senior fellow at the American Enterprise Institute, Todd Harrison, who focuses on space policy, tells the Sun. He worries that those activities, along with Mr. Musk’s decision to move SpaceX’s headquarters to Texas from California, could alienate employees and result in a loss of talent to competing aerospace manufacturers such as Blue Origin and Rocket Lab. 

As for the California Coastal Commission, it’s not clear whether the agency is authorized to block SpaceX’s proposal. The company is a leading contractor of the United States Space Force, so its launches are considered federal activity. Military officials had recommended an increased number of Falcon 9 rocket launches, arguing that the company’s work benefits America. 

When NASA put a man on the moon in 1969, space expenditure had been 5 percent of the federal budget. In recent decades, that sum dropped to 0.5 percent. In today’s Cold War 2.0 with China, a number of sources stressed that it’s up to private industry, rather than the government, to win the race for space. If America loses its lead, China will be eager to take its place.

America’s dependency on SpaceX is clear: NASA is paying the manufacturer $4 billion to use Starship to take astronauts to the surface of the moon during two upcoming missions in its Artemis program. SpaceX has also been tapped by NASA to help retrieve two astronauts from the International Space Station after Boeing’s Starliner was deemed unsafe for their return.

While NASA and the European Space Agency are working on a mission to return samples from Mars, SpaceX is also eager to do the same in what would be a first for humanity.  “We have to take a whole of government approach,” a senior fellow at the Center for Strategic and International Studies in Washington, Clayton Swope, tells the Sun.

“This,” Mr. Swope says, “isn’t just a matter of SpaceX winning contracts with NASA or the DoD. It’s about what we can do from a regulatory approach to make sure that SpaceX can continue to innovate and create these new technologies and push the envelope for the United States.”

The achievements of SpaceX are critical to America’s close competition with China over outer space, a race which carries a host of national security and military implications. Last week, as Americans celebrated Starship’s success, the nation’s biggest geopolitical rival must’ve shuddered at the challenge they will face of playing catch-up to the world’s leading space company. 

“Starship demonstrated about six years in advance that the US could possibly now have access to a strategic rocket that can also take 150 tons to low orbit in its reusable and expendable variety,” a professor of space policy at Arizona State University, Namrata Goswami, who co-authored the 2020 book “Scramble for the Skies,” tells the Sun. “That means that the ability for the US to build low earth mega constellations, to launch to the moon, to accomplish many of the space visions that the administrations are putting out, including Artemis and its Mars mission, got a boost.”

Also last week, SpaceX broke its own record for number of orbital launches performed by one company, notching its 100th launch of 2024 on its Falcon 9 rocket, which is also reusable. Chinese companies, meanwhile, rely on single-use rockets with older technology. They’ve conducted fewer than ten launches this year, widening the gap between SpaceX and its foreign competitors. 

When it comes to military space, however, China is catching up to, if not surpassing, America. In competition with Mr. Musk’s Starlink, the world’s largest Low-Earth Orbit satellite internet constellation, China is developing its own mega-constellations amid the global competition to field huge satellite networks. The Chinese equivalent of GPS, BeiDou, is newer and has more satellites than any other navigation system. 

China is also forging ahead with lunar exploration. In June, China’s Chang’e 6 spacecraft landed on the far side of the moon and retrieved samples for analysis on Earth — becoming the first country ever to do so. While the Artemis program aims to land astronauts on the moon by 2026, Beijing seeks to land a person on the moon by 2030 and establish a permanent base there by 2036.

The Chinese government is also doubling down in supporting private Chinese launch providers that are developing reusable rockets. Two Chinese startups, Deep Blue Aerospace and LandSpace Technology, conducted in September their most ambitious tests of vertical takeoff and landing, fundamental for reusability.

Yet compared to SpaceX, Chinese startups enjoy much less support from the government, as President Xi prefers to allocate funds to state-owned enterprises with links to the People’s Liberation Army. The country is therefore seeing slow progress in areas where private innovation is advantageous — like commercial space. “If you’re trying to support free market entrepreneurial activity, but also maintain tight government control, those two things are fundamentally incompatible,” Mr. Harrison says. 

The profit motive sparks innovation in the private sector, whereas state funded programs, such as NASA, as well as the space programs of China and India’s space program, are less motivated to advance quickly. “Today, if you want space technology, it cannot be just a government enterprise. State funded programs do not have the same kind of motivation that a commercial entity might have,” Ms. Goswami says. “Once there is a proof of concept, the cost of getting to space comes down.”

China, as a repressive regime, is also having trouble retaining talent to build up its space industry, Mr. Harrison says. “That’s where the United States has a fundamental asymmetric advantage. Not only do we have a free market economic system, not only do we have better access to capital because of the rule of law in our system, but our free and open society draws talent to our companies.”

Be it Mr. Musk or Mr. Xi, grasping for the moon or for Mars, whoever inches ahead in this space race will write the rules of the road for how business will be conducted in space for decades to come. The space industry operates on a “first come, first serve” basis, so if a private company or state enterprise mines for material on the moon, they may very well assume — or assert — that they own such riches.

“Do you want China setting the norms and making a system of space commerce that favors their economic system on Earth?” Mr. Harrison asks. “Or do you want it to be the United States with our allies and partners setting that precedent?”

If China eclipses America in the commercial space industry, Mr. Swope ventures, “I think we’ll look back and we’ll say, why didn’t we do more to stay in the lead? All we’ll have then is regret that we didn’t have that focus when we still had a shot.”

Concerns of outer space may feel kiloparsecs away, but they are no less imminent than problems like America’s national debt or the position of Washington on the world stage, Mr. Swope says. He imagines a future in which communities of people will live on the moon or on a space station. Babies will be born amongst the stars. Families will flourish there. “Whether or not those initial communities are Americans, or are communities that are organized by China — that’s what’s on the line now.”