China Accelerates Development of Low-Altitude Economy with New Regulations and Ambitious Goals

National Strategy and Regulatory Framework

China is making significant strides in developing its 'low-altitude economy,' a strategic sector encompassing manned and unmanned economic activities within airspace generally below 1,000 meters, and in some cases, up to 3,000 meters. This initiative has been a national priority since 2021, consistently featured in top-tier political documents, including the Government Work Reports and the 15th Five-Year Plan.

To oversee the sector's growth, the National Development and Reform Commission (NDRC) established the Low-Altitude Economy Development Division in December 2024. A robust regulatory framework is being put in place to support this expansion. The Civil Aviation Administration of China (CAAC) introduced a flexible framework for managing low-altitude airspace in 2023. By the end of 2025, the CAAC had released draft airworthiness standards for certain classes of uncrewed aircraft systems (UAS) and powered-lift aircraft, alongside technical specifications for rotorcraft, propellers, and civil water aerodromes.

Further strengthening oversight, the State Administration for Market Regulation issued mandatory standards for UAS identification and real-name registration, while the Central Air Traffic Management Office released specifications for integrated low-altitude supervision platforms to unify airspace management. A revised Civil Aviation Law, formally including drones and mandating airworthiness certification and product identification, is scheduled to take effect on July 1, 2026.

Economic Projections and Growth

The low-altitude economy is poised for substantial growth, with official projections indicating a rapid expansion. The sector exceeded CNY 500 billion in 2023. It contributed over 505.95 billion yuan (approximately $69.8 billion USD) to China's GDP in 2024, marking a 33.8% growth. The CAAC anticipates the low-altitude economy will reach CNY 1.5 trillion (US$210 billion) by the end of 2025 and soar to CNY 3.5 trillion (approximately $483 billion USD) by 2035.

Industry forecasts also suggest the sector could reach 2 trillion yuan (about $270 billion USD) by 2030. This rapid development is driven by a combination of technological innovation, application scenarios, and strong policy support.

Diverse Applications and Regional Pioneers

The low-altitude economy encompasses a wide array of applications, transforming various industries and public services:

• Logistics: Drone delivery services are expanding, with companies like Meituan launching numerous drone delivery routes in major cities such as Beijing, Shenzhen, Guangzhou, and Shanghai.
• Transportation: Electric vertical takeoff and landing (eVTOL) aircraft are progressing towards commercial launch, with China potentially seeing its first flying cars carrying paying passengers in 2026. Companies like AutoFlight and EHang have already earned eVTOL type certification.
• Agriculture: Unmanned aerial vehicles (UAVs) are widely used for crop analysis and spraying, significantly increasing efficiency.
• Public Services: Applications include infrastructure inspection, traffic management, tourism, and disaster response.

Regional governments are actively integrating the low-altitude economy into their development plans. Nearly 30 provincial and municipal governments have issued specific development plans. Shenzhen and Guangzhou are emerging as national leading pioneers, with Shenzhen aspiring to become a 'world-leading low-altitude economy hub' by 2028, already testing air taxis and drone delivery routes. Six cities—Shenzhen, Hangzhou, Hefei, Suzhou, Chengdu, and Chongqing—have been selected as pilot cities for opening airspace below 600 meters.

Industry Players and Future Outlook

A growing number of Chinese companies are actively involved in the low-altitude economy. Notable players include AutoFlight, EHang, XPeng (Aridge), GAC (GOVY), TransFuture Aviation (developing the Honghu Mark 1 eVTOL), Vertaxi (M1B cargo eVTOL), Volant Aerotech (VE25-100 Skylar), and MuYu Sky (AT1300 hybrid-electric VTOL). China now accounts for over 70% of the world's low-altitude UAV patent applications and boasts over 50,000 enterprises in related businesses.

The low-altitude economy is also recognized for its dual-use potential, with some regions integrating defense capacity into their low-altitude economy parks, utilizing UAVs for reconnaissance and airfield repair. This comprehensive approach underscores China's commitment to fostering a robust and innovative low-altitude sector.