On May 18, in Qionglai City, Sichuan Province, a China UAV carrying a parcel took off from Taohua Community in Nanbaoshan Town. It followed a predetermined route, traversing 11 kilometers of rugged mountainous terrain, and landed precisely in Zhitai Village just five minutes later, successfully delivering packages to local villagers. This China drone operation demonstrated a significant advantage over traditional land transport by overcoming the challenges of complex topography and poor accessibility in remote areas. This event is a microcosm of the growing low-altitude economy in China, which is gradually emerging as a pivotal sector in global economic development.
The low-altitude economy represents an innovative economic paradigm that encompasses low-altitude manufacturing, low-altitude logistics, and various other sectors, spanning primary, secondary, and tertiary industries. It is widely regarded as a manifestation of new productive forces. Globally, numerous countries and regions are strategically positioning the development of the low-altitude economy as a key driver of growth, intensifying investments and support to secure a dominant position in this emerging field. In this context, China’s focus on the low-altitude domain has gained immense significance. In 2024, the low-altitude economy was formally included in the Chinese government work report as an “emerging and future industry.” The most recent government work report reiterated this emphasis, calling for large-scale demonstration actions for new technologies, products, and scenarios, and advocating the safe and healthy development of emerging industries, including commercial aerospace and the low-altitude economy. Despite these advancements, several critical pain points must be addressed to fully realize the potential of China’s low-altitude economy.
1. Enhanced Development and Management of Airspace Resources
China has achieved notable progress in areas such as eVTOL technology research and development and the manufacturing of unmanned aerial vehicles. However, as the low-altitude economy advances, strengthening airspace management and safety supervision remains a paramount concern. Airspace resources are a fundamental prerequisite for the growth of the low-altitude economy, yet China lags behind many nations in this regard. Studies indicate that the utilization rate of low-altitude airspace for general aviation in China is less than 30%, which falls below the global average. This shortfall is partly attributed to China’s limited experience in general aviation compared to countries like the United States and the United Kingdom, which possess a first-mover advantage. In China, general aviation has primarily been concentrated in social public services, with slower progress in infrastructure development and business model innovation, thereby impeding the comprehensive implementation of the low-altitude economy.
As of December 31, 2024, the number of general aviation airports under management in China stood at 475, approximately only 9% of the public general aviation airports in the United States. This disparity highlights the inadequacy in meeting general aviation demands. Furthermore, the absence of mature business models and profitable operational frameworks has resulted in insufficient flight demand, further limiting airspace utilization. Kang Jian, Vice President of Chain Digital Industry Research Institute, emphasized in an interview that the healthy and stable development of low-altitude transportation relies on dual guarantees of airspace management and safety supervision. He noted that China lacks overall planning and specific guidance in low-altitude airspace management, leading to fragmented and uncoordinated efforts by local governments in developing the low-altitude economy and planning airspace resources.
The persistence of outdatedapproaches in low-altitude airspace approval and management continues to hinder progress. Kang Jian explained, “The flight volume in the low-altitude economy far exceeds that of traditional civil aviation, with more dynamic and variable routes. However, China’s current low-altitude airspace management still adheres to methods designed for conventional civil aviation, resulting in cumbersome and time-consuming application and reporting procedures. Additionally, coordinating airspace division and usage rights poses significant challenges, constraining the scaled and industrialized development of the low-altitude economy.” During the recent National People’s Congress, Li Yangmin, a member of the National Committee of the Chinese People’s Political Consultative Conference and former general manager of China Eastern Airlines, highlighted that with the rapid increase in low-altitude aircraft, both the safety technology standards and the regulatory framework for these aircraft require urgent enhancement. He pointed out that the number of registered general aviation airports in China falls short of developmental needs, and a comprehensive low-altitude flight network has yet to be established.
Another issue is the fragmentation and regional imbalance in the development of China’s low-altitude economy. Currently, the openness of low-altitude airspace is limited. For instance, Fengyi Technology reported that as of October 2024, the 220,000 square kilometers of airspace it had approved were predominantly concentrated south of the Yangtze River, with minimal activity in northern regions. In November 2024, the Central Air Traffic Management Committee initiated eVTOL pilot programs in six cities, all located in southern China. This scattered distribution of open airspace zones and routes also restricts the growth of sectors like low-altitude logistics. ZTO Express expressed that due to the non-contiguous nature of pilot airspaces allocated to logistics companies, firms are confined to non-networked low-altitude logistics routes. This limitation forces them to substitute internal transport methods rather than offering comprehensive air logistics services to external clients, thereby stifling the potential of China UAV applications in broader markets.
2. Low-Altitude Support System Requires Comprehensive Improvement
As an emerging sector, the low-altitude economy faces deficiencies in several areas, including safety supervision, communication network infrastructure, physical infrastructure, and standard establishment. On one hand, China’s infrastructure coverage is insufficient and necessitates further expansion. Li Yangmin asserted that although local governments and enterprises are ramping up infrastructure construction efforts, the overall development of low-altitude economy infrastructure in China will require at least two to three more years to meet demands. On the other hand, the low-altitude support system remains underdeveloped, unable to sustain large-scale demonstration applications and commercial expansion of the low-altitude economy.
Kang Jian highlighted that in terms of safety, both domestic and international regulations concerning low-altitude aircraft technical standards and flight rules are still in exploratory phases. This legal ambiguity exposes businesses to uncertainties and risks, dampening innovation incentives. In infrastructure construction, critical systems such as urban air traffic control information systems and airspace management systems are dispersed across various sectors, complicating integration efforts. There is a notable lack of robust network information infrastructure to support low-altitude perception, detection, and communication capabilities. The complex operational environments encountered by drones during large-scale commercial deployment present additional hurdles for the practical application of the low-altitude economy.
The “2024 China Low-Altitude Logistics Development Report” released by Chain Digital Industry Research Institute identified maintaining stable drone flight in complex conditions as a major technical challenge. In urban settings with numerous signal interference sources and fluctuating wind speeds, preventing drone disruptions is crucial for ensuring safe and reliable operations. Kang Jian further elaborated that existing low-altitude communication systems suffer from poor performance, slow speeds, limited scale, and inefficient management. In intricate environments, communication signals are prone to interference, leading to unstable data transmission. “In practical scenarios, ground base station communications are often obstructed by high-rise buildings, and the construction of dedicated air-ground communication networks is incomplete. This inadequacy fails to meet the stability and real-time requirements essential for low-altitude logistics, adversely affecting flight safety and the accuracy of logistics deliveries involving China drone operations,” Kang Jian stated.
3. Supply Chain Yet to Be Fully Activated
Recent performance forecasts from numerous companies associated with the low-altitude economy indicate an overall unfavorable trend, particularly among drone manufacturers, general aviation aircraft producers, and eVTOL host factories, which anticipate losses. For example, AVIC (Chengdu) UAV System Co., Ltd., a firm specializing in drone system research, development, and manufacturing, projected in its 2024 performance forecast a net loss attributable to shareholders of the listed company ranging between 49 million yuan and 58 million yuan, a shift from profitability to loss. The company previously cited insufficient market demand and a decline in delivered product quantities as key factors for the revenue drop. Similarly, Zongheng Co., Ltd., often referred to as the “first stock of industrial drones” in China, a net loss of 33.6512 million yuan for 2024, marking its fourth consecutive year of losses. Other enterprises like Aerospace Development, Shanggong Shenbei, and Guoanda also expect varying degrees of financial setbacks.
The underlying cause of these losses is the inactive state of China’s low-altitude economy supply chain. Although the application scenarios for the low-altitude economy are diverse, factors such as high costs and challenges in practical implementation have prevented the formation of large-scale commercial products. This inability to generate stable market demand further hampers the development of the overall supply chain for the low-altitude economy. Moreover, achieving true commercialization in the low-altitude economy demands substantial investments of time and capital in research and development. Given that areas like airspace resource exploitation and standard setting still require enhancement, the prolonged market feedback cycle not only affects corporate profitability but also increases uncertainties in the supply chain’s evolution.
During the National People’s Congress, Wu Renbiao, a representative and vice president of the Civil Aviation University of China, cautioned that while local enthusiasm for developing the low-altitude economy is high, it is essential to avoid a “rush to action” phenomenon. He stressed that although the low-altitude economy has broad applications, the consumer base is likely to remain small in the short term, posing difficulties in market scale expansion. Therefore, scientifically forecasting the low-altitude economy market and effectively nurturing it are critical steps. Kang Jian added that low-altitude logistics, as a significant application area, has achieved relative maturity with successful trial flights in multiple locations. However, establishing a genuine new model for logistics transportation remains premature. The efficient transport and payload capacities, endurance, and obstacle avoidance capabilities of China UAV logistics need further reinforcement. Additionally, the planning and construction of infrastructure such as charging stations and landing sites by various regions are imperative for future growth.
The integration of China drone technology into daily operations faces persistent obstacles. For instance, the reliance on non-networked routes limits the scalability of services, while regulatory hurdles slow down innovation. Companies involved in China UAV production must navigate these complexities while striving for cost-effectiveness and reliability. The current scenario underscores the need for coordinated efforts between government bodies and private enterprises to address these supply chain issues. By fostering a more cohesive ecosystem, the low-altitude economy can move towards sustainable development, ultimately benefiting sectors like logistics, agriculture, and emergency services through enhanced China drone applications.
In summary, the journey towards a fully realized low-altitude economy in China is fraught with challenges. From airspace management and infrastructure gaps to supply chain inefficiencies, each aspect requires meticulous attention and strategic intervention. The repeated emphasis on China UAV and China drone technologies in various reports and discussions highlights their central role in this transformation. As stakeholders work towards solutions, the potential for low-altitude activities to revolutionize transportation and other industries remains immense, contingent upon overcoming the existing bottlenecks.