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China’s surging private space industry is out to challenge the US

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China’s surging private space industry is out to challenge the US


“Xi’s goal was that if China has to become a critical player in technology, including in civil space and aerospace, it was critical to develop a space ecosystem that includes the private sector,” says Namrata Goswami, a geopolitics expert based in Montgomery, Alabama, who’s been studying China’s space program for many years. “He was taking a cue from the American private sector to encourage innovation from a talent pool that extended beyond state-funded organizations.”

As a result, there are now 78 commercial space companies operating in China, according to a 2019 report by the Institute for Defense Analysis. More than half have been founded since 2014, and the vast majority focus on satellite manufacturing and launch services.

For example, Galactic Energy, founded in February 2018, is building its Ceres rocket to offer rapid launch service for single payloads, while its Pallas rocket is being built to deploy entire constellations. Rival company i-Space, formed in 2016, became the first commercial Chinese company to make it to space with its Hyperbola-1 in July 2019. It wants to pursue reusable first-stage boosters that can land vertically, like those from SpaceX. So does LinkSpace (founded in 2014), although it also hopes to use rockets to deliver packages from one terrestrial location to another.

Spacety, founded in 2016, wants to turn around customer orders to build and launch its small satellites in just six months. In December it launched a miniaturized version of a satellite that uses 2D radar images to build 3D reconstructions of terrestrial landscapes. Weeks later, it released the first images taken by the satellite, Hisea-1, featuring three-meter resolution. Spacety wants to launch a constellation of these satellites to offer high-quality imaging at low cost. 

To a large extent, China is following the same blueprint drawn up by the US: using government contracts and subsidies to give these companies a foot up. US firms like SpaceX benefited greatly from NASA contracts that paid out millions to build and test rockets and space vehicles for delivering cargo to the International Space Station. With that experience under its belt, SpaceX was able to attract more customers with greater confidence. 

Venture capital is another tried-and-true route. The IDA report estimates that VC funding for Chinese space companies was up to $516 million in 2018—far shy of the $2.2 billion American companies raised, but nothing to scoff at for an industry that really only began seven years ago. At least 42 companies had no known government funding. 

And much of the government support these companies do receive doesn’t have a federal origin, but a provincial one. “[These companies] are drawing high-tech development to these local communities,” says Hines. “And in return, they’re given more autonomy by the local government.” While most have headquarters in Beijing, many keep facilities in Shenzhen, Chongqing, and other areas that might draw talent from local universities. 

There’s also one advantage specific to China: manufacturing. “What is the best country to trust for manufacturing needs?” asks James Zheng, the CEO of Spacety’s Luxembourg headquarters. “It’s China. It’s the manufacturing center of the world.” Zheng believes the country is in a better position than any other to take advantage of the space industry’s new need for mass production of satellites and rockets alike. 

Making friends

The most critical strategic reason to encourage a private space sector is to create opportunities for international collaboration—particularly to attract customers wary of being seen to mix with the Chinese government. (US agencies and government contractors, for example, are barred from working with any groups the regime funds.) Document 60 and others issued by China’s National Development and Reform Commission were aimed not just at promoting technological innovation, but also at drawing in foreign investment and maximizing a customer base beyond Chinese borders.

“China realizes there are certain things they cannot get on their own,” says Frans von der Dunk, a space policy expert at the University of Nebraska–Lincoln. Chinese companies like LandSpace and MinoSpace have worked to accrue funding through foreign investment, escaping dependence on state subsidies. And by avoiding state funding, a company can also avoid an array of restrictions on what it can and can’t do (such as constraints on talking with the media). Foreign investment also makes it easier to compete on a global scale: you’re taking on clients around the world, launching from other countries, and bringing talent from outside China. 

Although China is taking inspiration from the US in building out its private industry, the nature of the Chinese state also means these new companies face obstacles that their rivals in the West don’t have to worry about. While Chinese companies may look private on paper, they must still submit to government guidance and control, and accept some level of interference. It may be difficult for them to make a case to potential overseas customers that they are independent. The distinction between companies that are truly private and those that are more or less state actors is still quite fuzzy, especially if the government is a frequent customer. “That could still lead to a lack of trust from other partners,” says Goswami. It doesn’t help that the government itself is often very cagey about what its national program is even up to.

And Hines adds that it’s not always clear exactly how separate these companies are from, say, the People’s Liberation Army, given the historical ties between the space and defense sectors. “Some of these things will pose significant hurdles for the commercial space sector as it tries to expand,” he says.

Other challenges

None of these new companies are yet profitable, and it will be quite some time before they are. “There isn’t any sign of indication that this industry will flop,” says Hines. “But many experts do think a lot of these companies will go out of business.” Apart from the challenge of attracting customers outside China, many companies are still trying to figure out who exactly their customers ought to be. 

American companies like SpaceX and Blue Origin had billionaire founders ready to burn cash to take on large risks, push past big failures, and finally get off the ground. And while a Chinese billionaire entered the industry last year“there is no Chinese Elon Musk to push these riskier ventures forward,” says Hines. It’s also unclear whether Chinese companies, even those supported by wealthy backers, will have that appetite for risk.

Zheng says one thing Spacety has offered is exceptional transparency with clients for whom it is developing satellites—something that’s still uncommon for Chinese firms. “Many of them have no kind of spaceflight experience,” he says. “They want to see and learn what goes on, but the large companies won’t allow for that. We’re different.”

Lastly, China needs to figure out a legal framework that can guide the commercial industry in more explicit terms, and specify what’s allowed and what is not. It is the only major space power without a specialized space law. (The American version is Title 51 of the United States Code.) While the hope is that free enterprise can generate innovation, national governments are still liable for whatever space activities a country’s private companies conduct. There’s a need to license and approve these missions, ensuring that governments know what they’ve signed up for. 

Despite all this, China’s space industry is rolling forward. These new startups haven’t just adopted American business practices—they’ve also begun to embrace American startup culture as a way to foster business relationships and grow. During my video call with Spacety’s Zheng, the company’s Beijing CEO, Yang Feng, briefly dropped in to say hello, on his way back from a party where he’d been schmoozing and enjoying drinks with many peers and partners in the industry. “It’s part of the way we do business now,” Zheng said. “Innovation is not just new technology itself—it’s also a new way of doing things.” 

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The Download: metaverse fashion, and looser covid rules in China

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The Download: metaverse fashion, and looser covid rules in China


Fashion creator Jenni Svoboda is designing a beanie with a melted cupcake top, sprinkles, and doughnuts for ears. But this outlandish accessory isn’t destined for the physical world—Svoboda is designing for the metaverse. She’s working in a burgeoning, if bizarre, new niche: fashion stylists who create or curate outfits for people in virtual spaces.

Metaverse stylists are increasingly sought-after as frequent users seek help dressing their avatars—often in experimental, wildly creative looks that defy personal expectations, societal standards, and sometimes even physics. 

Stylists like Svoboda are among those shaping the metaverse fashion industry, which is already generating hundreds of millions of dollars. But while, to the casual observer, it can seem outlandish and even obscene to spend so much money on virtual clothes, there are deeper, more personal, reasons why people are hiring professionals to curate their virtual outfits. Read the full story.

—Tanya Basu

Making sense of the changes to China’s zero-covid policy

On December 1, 2019, the first known covid-19 patient started showing symptoms in Wuhan. Three years later, China is the last country in the world holding on to strict pandemic control restrictions. However, after days of intense protests that shocked the world, it looks as if things could finally change.

Beijing has just announced wide-ranging relaxations of its zero covid policy, including allowing people to quarantine at home instead of in special facilities for the first time.

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Uber’s facial recognition is locking Indian drivers out of their accounts 

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Uber checks that a driver’s face matches what the company has on file through a program called “Real-Time ID Check.” It was rolled out in the US in 2016, in India in 2017, and then in other markets. “This prevents fraud and protects drivers’ accounts from being compromised. It also protects riders by building another layer of accountability into the app to ensure the right person is behind the wheel,” Joe Sullivan, Uber’s chief security officer, said in a statement in 2017.

But the company’s driver verification procedures are far from seamless. Adnan Taqi, an Uber driver in Mumbai, ran into trouble with it when the app prompted him to take a selfie around dusk. He was locked out for 48 hours, a big dent in his work schedule—he says he drives 18 hours straight, sometimes as much as 24 hours, to be able to make a living. Days later, he took a selfie that locked him out of his account again, this time for a whole week. That time, Taqi suspects, it came down to hair: “I hadn’t shaved for a few days and my hair had also grown out a bit,” he says. 

More than a dozen drivers interviewed for this story detailed instances of having to find better lighting to avoid being locked out of their Uber accounts. “Whenever Uber asks for a selfie in the evenings or at night, I’ve had to pull over and go under a streetlight to click a clear picture—otherwise there are chances of getting rejected,” said Santosh Kumar, an Uber driver from Hyderabad. 

Others have struggled with scratches on their cameras and low-budget smartphones. The problem isn’t unique to Uber. Drivers with Ola, which is backed by SoftBank, face similar issues. 

Some of these struggles can be explained by natural limitations in face recognition technology. The software starts by converting your face into a set of points, explains Jernej Kavka, an independent technology consultant with access to Microsoft’s Face API, which is what Uber uses to power Real-Time ID Check. 

Adnan Taqi holds up his phone in the driver’s seat of his car. Variations in lighting and facial hair have likely caused him to lose access to the app.

SELVAPRAKASH LAKSHMANAN

“With excessive facial hair, the points change and it may not recognize where the chin is,” Kavka says. The same thing happens when there is low lighting or the phone’s camera doesn’t have a good contrast. “This makes it difficult for the computer to detect edges,” he explains.

But the software may be especially brittle in India. In December 2021, tech policy researchers Smriti Parsheera (a fellow with the CyberBRICS project) and Gaurav Jain (an economist with the International Finance Corporation) posted a preprint paper that audited four commercial facial processing tools—Amazon’s Rekognition, Microsoft Azure’s Face, Face++, and FaceX—for their performance on Indian faces. When the software was applied to a database of 32,184 election candidates, Microsoft’s Face failed to even detect the presence of a face in more than 1,000 images, throwing an error rate of more than 3%—the worst among the four. 

It could be that the Uber app is failing drivers because its software was not trained on a diverse range of Indian faces, Parsheera says. But she says there may be other issues at play as well. “There could be a number of other contributing factors like lighting, angle, effects of aging, etc.,” she explained in writing. “But the lack of transparency surrounding the use of such systems makes it hard to provide a more concrete explanation.” 

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The Download: Uber’s flawed facial recognition, and police drones

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The Download: Uber’s flawed facial recognition, and police drones


One evening in February last year, a 23-year-old Uber driver named Niradi Srikanth was getting ready to start another shift, ferrying passengers around the south Indian city of Hyderabad. He pointed the phone at his face to take a selfie to verify his identity. The process usually worked seamlessly. But this time he was unable to log in.

Srikanth suspected it was because he had recently shaved his head. After further attempts to log in were rejected, Uber informed him that his account had been blocked. He is not alone. In a survey conducted by MIT Technology Review of 150 Uber drivers in the country, almost half had been either temporarily or permanently locked out of their accounts because of problems with their selfie.

Hundreds of thousands of India’s gig economy workers are at the mercy of facial recognition technology, with few legal, policy or regulatory protections. For workers like Srikanth, getting blocked from or kicked off a platform can have devastating consequences. Read the full story.

—Varsha Bansal

I met a police drone in VR—and hated it

Police departments across the world are embracing drones, deploying them for everything from surveillance and intelligence gathering to even chasing criminals. Yet none of them seem to be trying to find out how encounters with drones leave people feeling—or whether the technology will help or hinder policing work.

A team from University College London and the London School of Economics is filling in the gaps, studying how people react when meeting police drones in virtual reality, and whether they come away feeling more or less trusting of the police. 

MIT Technology Review’s Melissa Heikkilä came away from her encounter with a VR police drone feeling unnerved. If others feel the same way, the big question is whether these drones are effective tools for policing in the first place. Read the full story.

Melissa’s story is from The Algorithm, her weekly newsletter covering AI and its effects on society. Sign up to receive it in your inbox every Monday.

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