The commercial space race is about to begin. Early Saturday morning at 4:55 a.m. EDT, the first privately designed and built spacecraft destined for the International Space Station is expected to lift off from the historic Cape Canaveral Air Force Station not far from the Atlantic Ocean on Florida's east coast. The Falcon 9 rocket and Dragon capsule are designed and built by Space Exploration Technologies -- the company better known as SpaceX -- at the company's factory not far from the Pacific Ocean in Hawthorne, California. Tomorrow's scheduled launch puts an exclamation point on a new era of space transportation. If the first era of space flight focused on a Cold War-driven race to show what could be done, and the second era focused on making space flight and delivering orbiting payloads routine, this new era is focused on making all of the above a lot less expensive. SpaceX is leading the charge to bring down the cost of flying to space. Driven by a personal desire to make life multi-planetary -- aka travel to Mars -- the company's founder and leader Elon Musk has built a program with about $4 billion worth of contracts and launch orders already on its books. But it has only launched a few customer payloads so far. With just a handful of launches under its belt, SpaceX has yet to successfully prove its business case of dramatically reducing the cost of delivering payloads into orbit. And both its founder Elon Musk, and current customer NASA, rarely miss an opportunity to emphasize the challenging nature of the upcoming ISS mission. But the company is on target for backing up its low cost promise and is managing to achieve this goal by spending hundreds of millions, rather than billions of dollars. Musk honed his business skills in the internet startup arena of the late 1990s. He makes no secret that one of the keys to reducing the cost of space flight is operating an efficient company that is nimble and lacks the bloated layers that exist in many of the large, veteran aerospace companies that have been building rockets and spacecraft for the past 50 years. SpaceX has received large investments from private sources -- including a hundred million from Musk himself -- as well as funding from NASA. But the company operates more like a lean startup despite the fact it should soon overtake Russia as the number-one producer of rocket engines in the world. Like at most startups, employees often wear multiple hats. Engineers, including Musk, work in an office-free open cubicle layout less than a minute's walk from where technicians are building rocket engines and machines are welding together space capsules. Leave your desk, walk past a conference room, open a door and you step into a giant rocket factory. Actually the first thing you walk past on the factory floor is open floor space that is the cafeteria, which is right next to the mission control room, then a few steps after that you walk by the rocket engine assembly line. During lunch you can watch the software team rehearsing the upcoming mission to the ISS a few feet away to your right. You can hear the construction of aluminum-lithium being formed and machined into the cylinders that will form the body of the Falcon 9 rocket just out of sight in front of you, or watch the complex circuitry of the flight hardware and avionics being inspected under a microscope to your left. More than 80 percent of the Falcon rocket and Dragon spacecraft are built in-house. From the combustion chamber and nozzle at the bottom of the engine, to the capsule and its protective shield at the top. SpaceX designs and builds just about everything itself in a factory at the Hawthorne Airport where Jack Northrop built his legendary airplanes including flying wings and fighter jets. Just a handful of years ago, this same building was home to a factory making panels for Boeing 747s, today it is a self-contained space program hoping to make space flight as inexpensive and reliable as possible.

Last year, former Defense Secretary Robert Gates was greeted in Beijing by China’s experimental stealth jet buzzing over his head. Gates didn’t sweat it: He proclaimed that the J-20 wouldn’t be ready until at least 2020. Oops.

The Pentagon’s top China official has now revised that estimate. The J-20, China’s first stealth jet, will be operationally ready “no sooner than 2018,” David Helvey, deputy secretary of defense for East Asia and Asia Pacific Security Affairs, told reporters Friday.

The new anticipated timetable for the J-20 hardly augurs the end of American military dominance. But it wasn’t the only Chinese military development that took the Pentagon by surprise last year.

According to the Pentagon’s new report (.pdf) on the Chinese military, China’s got three nuclear-powered submarines — an advance that Helvey conceded the U.S. military didn’t anticipate. China also fielded an “improved” amphibious assault vessel last year, while the U.S. Marine Corps is having trouble upgrading its own.

And that’s just the stuff that the Pentagon can see. Helvey speculated that the Chinese military keeps its research, foreign military acquisitions and nuclear modernization off its books. The report estimates that China’s declared $106 billion annual military budget is really more like $120 to $180 billion.

None of that means China’s military will overtake America’s anytime soon. China won’t, for instance, have a global communications and navigation satellite network until 2020, which means it doesn’t have a prayer of having a truly global Navy until at least then — even if it starts building its own aircraft carriers. Helvey disclosed that China still has neither built nor acquired any armed drones, and the spy robo-planes it has are the Harpies that Israel sold it nearly a decade ago. And while China may have an amphibious ship, the report says it can’t actually invade or hold nearby Taiwan, let alone any target further away or better defended.

At the same time, it’s hard not to notice that America’s own stealth fleet keeps racking up #fails.

First there’s the Air Force’s F-22 Raptor. It’s choking its pilots, and the Air Force doesn’t know why. Gates’ successor, Leon Panetta, this week restricted Raptor flights and hurried up an installation of a backup oxygen system onto the jets — which won’t be complete until at least 2014. Panetta did notground the F-22, so the nearly 200 planes will definitely be in Air Force’s arsenal ahead of the J-20. But until the mysterious oxygen problems are decisively fixed, pilots may be wary of flying them, and the Air Force leadership may be wary of ordering it into combat.

Then there’s the F-35 Joint Strike Fighter, a family of jets for the Air Force, Navy and Marines. It’s already the most expensive weapons program in human history — current estimates peg the F-35′s lifetime costs over decades at $1.1 trillion-with-a-T — and not a single one of the advanced, powerful stealth jets is in the air. The Marines’ variant was so riddled with cost-overruns that it was put on a timeout in 2011; it’s off probation now. But testers keep finding expensive engineering flaws with the family of jets, and the Pentagon has given up predicting when it will actually patrol the skies.

The U.S. doesn’t want conflict with the Chinese, whose economy is inextricably tied to its own. But it might not see one coming. Especially not if China’s stealth planes are advancing while its own are stalling.