China's National Development and Reform Commission (NDRC) has established a department to boost the low-altitude economy, targeting growth in 2025 and beyond. This move aligns with Beijing's recent push for aviation reforms, focusing on airspace management, traffic systems, and low-altitude infrastructure.
According to state media Xinhua, the South China Morning Post, and other sources, the department will draft strategies, implement long-term plans, and recommend policies to address key challenges in the low-altitude economy.
The newly formed department has hosted seminars on smart low-altitude networks, infrastructure planning, and collaborations with the Ministries of Natural Resources and Ecology and Environment, alongside industry experts.
The low-altitude economy covers aerial activities below 1,000 meters (up to 3,000 meters in some areas), including drone cargo, passenger transport, and electric vertical takeoff and landing (eVTOL) applications like air taxis, agricultural spraying, and disease monitoring.
This emerging sector is reshaping civil aviation, cutting logistics costs, and excelling in urban transport, emergency delivery, and remote logistics. Featured in China's 2024 work report, it aligns with President Xi Jinping's vision for "new productive forces" that emphasize tech innovation and economic self-reliance.
Xinhua reports that China's low-altitude economy exceeded CNY500 billion (US$68.2 billion) in 2023 and is projected to top CNY2 trillion by 2030. The industry, however, faces an immature business model, making the next three years critical.
Experts predict that policy backing and innovation will position the low-altitude economy as a key driver of China's high-quality growth and industrial upgrades.
Infrastructure and investment boost development
On December 20, 2024, Shanghai launched Shanghai Low-Altitude Economy Industry Development Co., Ltd., with CNY900 million in capital. Key shareholders, including state-owned firms such as Shanghai Airport Group, Shanghai Airport Investment Co., Ltd., Shanghai Donghongqiao Investment and Development Co., Shanghai Urban Construction, Shanghai Jiushi, and Shanghai Information Industry Group, span sectors such as airport operations, urban transport, and communications.
Backed by policy support, Chinese automakers are accelerating flying vehicle R&D. GAC Group debuted its Govy brand and GOVY AirJet prototype in December 2024, while Changan Automobile partnered with UAV maker EHang Intelligent on flying car development and operations.
Education sector responds to industry demands
To address talent gaps, Hong Kong Polytechnic University is developing a master's program in aircraft hardware, engine design, and AI-integrated software. Universities across China are also launching low-altitude economy courses.
Vocational schools are offering drone operation courses to fill a talent gap. With over 2 million registered drones in China, only half of the 17,000 operators are certified, leaving a shortage of nearly 1 million.
Growth drivers and market potential
According to the industry analysis platform, Qianzhan.com highlights three trends driving China's low-altitude economy: stronger policy support, promising growth prospects, and accelerated innovation.
Promising growth areas include drones, eVTOLs, and intelligent low-altitude networks. China, a leading drone producer, has seen their use expand globally, from logistics and security to filming and performances.
Analysts view 2024 as the launch year for eVTOL commercialization in China, with companies securing permits and partnerships. eVTOLs are poised to join drones as a trillion-Chinese-yuan market.
China's live streaming boom, fueled by policy support, broadband expansion, and video tech advancements, is set to drive demand for drone aerial broadcasts, accelerating growth in low-altitude photography.
Challenges in implementation
Despite government backing, experts cited by The Epoch Times highlight significant gaps in China's low-altitude economy. These include a lack of general aviation airports, drone takeoff points, battery swap stations, airspace management systems, and urban three-dimensional transport networks, limiting short-term progress.
The low-altitude economy often replaces traditional sectors, offering limited economic benefits. For instance, drone deliveries may help operators but risk displacing courier workers, leading to job losses.
Unlike the US and Europe, where licensed operators can access open airspace, China's airspace remains under military control, restricting broader industry growth.
Airspace regulation is a major constraint on China's low-altitude economy. With military oversight and national security concerns, progress depends on government decisions regarding airspace openness.