A Chinese rocket has left hundreds of stargazers in awe after it lit up the night sky while passing over north-eastern Australia. 

Residents in Queensland and northern New South Wales saw the Zhuque-2E rocket, launched by private firm LandSpace, leave a glowing trail shaped like an arrow. 

Footage shared to the Aurora Australis Facebook page showed the rocket streak over Newcastle Harbour before disappearing into the night sky about 6.40pm on Tuesday. 

University of Southern Queensland astrophysicist Jonti Horner told the ABC the rocket had launched from a Chinese satellite centre 20 minutes earlier.

'We got a spectacular light show,' he said. 

Prof Horner said sunlight caused the rocket to emit a white and blue glow. 

'The rocket was above the atmosphere, and it did what I've seen described by some people as passivation,' he said.

'It's essentially the rocket letting out its excess gases, putting them off into space before it deploys those satellites.'

Some onlookers said they saw the silvery or blue-tinted ball of gas turn red before disappearing, which Prof Horner said was the rocket moving into the Earth's shadow. 

'When you're at sunset, and you look up at the clouds, or you look at the Earth around you, things go red. Just the same with this,' he said. 

Chinese state media, which declared the launch a success, said the rocket carried two satellites when it launched from north-west China at 4.23pm Beijing time.

Many stargazers said they were amazed by what they saw. 

'I saw it driving home and rang my partner to go outside to have a look,' one said. 

'It looked like an alien ship emerging from the cloud when I first saw it.' 

'It was super bright and sooo big over the clear skies of Gin Gin,' a second said. 

'I also saw the amazing beautiful cloud formation, stopped in my tracks and thought wow never seen anything like that before,' a third agreed.