The expansion of commercial space activities in China has heightened environmental risks from launch emissions, space debris, orbital collisions, and atmospheric reentry. International space law sets out principles of environmental protection and State responsibility, but their implementation depends on more specific domestic rules. China’s current regulatory framework for space activities has introduced preliminary rules on registering space objects, licensing civil space launches, mitigating and protecting against space debris, and administering satellite projects. However, the framework lacks a dedicated national law governing space activities and relies largely on ministerial rules and other normative documents. Provisions addressing commercial operations and environmental protection remain fragmented, and the responsibility and liability regime is underdeveloped. To meet the practical demands of green development in the commercial space sector, China should enact dedicated space legislation to establish a basic framework for green development, implement environmental requirements through life-cycle regulation and a coherent system of standards, strengthen the environmental obligations and risk accountability of commercial space actors through a clear responsibility and liability regime, and advance governance of the outer space environment through international coordination and multifaceted cooperation. Through these measures, China can better reconcile the high-quality development of commercial space activities with the protection of the terrestrial and outer space environments and the long-term sustainable use of outer space.