China’s Futuristic Industries: Investment Prospects in the Emerging Low-Altitude Economy

Posted by Written by Yi Wu Reading Time: 6 minutes

We examine the investment opportunities and business outlook of China’s burgeoning low-altitude economy, buoyed by supportive government policies, evolving regulatory frameworks, and regional incentives tailored for companies operating within this economic sector.

During the annual Central Economic Work Conference, which concluded on December 18, 2023, Chinese policymakers outlined priorities for 2024 economic work. The meeting identified the low-altitude economy as a strategic emerging sector, alongside key industries such as bio-manufacturing and commercial aerospace innovation.

The term “low-altitude economy” refers to a spectrum of economic activities occurring within low altitude airspace, defined as the space 1,000 meters above ground. This includes various activities and industries centered around civil-manned and unmanned aerial vehicles, such as passenger transport, cargo delivery, manufacturing, low-altitude flight operations, and integrated services.

Futuristic scenarios, such as drones delivering packages, winged taxis for daily commutes, and hobbyist sightseeing helicopters, could become a reality in China as the low-altitude economy takes off. Such operations could also play critical roles in aerial logistics, emergency medical rescue, and firefighting efforts.

In recent years, buoyed by supportive policies, China’s low-altitude economic sector has experienced rapid growth, witnessing an increase in both low-altitude aircraft and enterprises. With vast potential, it is projected to contribute up to US$700 billion (RMB 5 trillion) to the country’s economy by 2025, as indicated by a white paper published in 2023 by the International Digital Economy Academy in Shenzhen.

Understanding China’s robust low-altitude economy market

Backed by advanced technology, rising domestic demand, and government support, China’s low-altitude economy is experiencing rapid expansion. This emerging industry presents an attractive market, catering to diverse needs across commercial, industrial, civil, and military sectors. The applications of low-altitude aerial vehicles are becoming increasingly diverse, covering existing logistic-based services as well as extending into futuristic technological use case scenarios.

For example, drones, integral to various sectors, are experiencing exponential growth. By the end of August 2023, China had over 1.11 million registered civilian unmanned aerial vehicles, a 16 percent increase from the end of 2022, according to the Civil Aviation Administration of China (CAAC). With 182,000 drone pilot licenses issued and over 17,000 registered drone operating enterprises, the development of low-altitude infrastructure is primed to attract substantial investments, fostering economic growth. Civilian drones collectively logged over 16.8 million flight hours from January to August in 2023.

Embracing low-altitude commercial flights, these vehicles operate logistics and short-distance navigable transportation. Ongoing tests have utilized drones for food delivery to streamline direct deliveries, as seen in Shenzhen. Furthermore, companies like, SF Express, Meituan, ZT Express, Cainiao, and China Post are increasing their efforts to develop large-scale logistics drones, thereby building an airway logistics network. The future also envisions a pivotal role for drones in enhancing medical care services, as demonstrated by the Shenzhen-based Heli-Eastern. Operating a fleet of 30 helicopters, the company pioneers fast medical services, spanning emergency rescue, business flights, and helicopter touring.

The rising demand for a next-generation logistics network is also fueling growth prospects in China’s drone market. With a population exceeding 1.4 billion and several cities ranking among the world’s top 20 for highest density, China faces an urgent need for easier movement of people, goods, and services. The country’s robust industrial base, particularly strong in cutting-edge technologies, has become a magnet for enterprises specializing in innovative aviation solutions like manned electric vertical take-off and landing (eVTOL) aircraft. The low-altitude economy is also closely linked with the artificial intelligence (AI) and power battery industries.

Anticipating future urban mobility, commercial passenger drones also offer potential in alleviating rush-hour congestion through their ability to fly in straight lines, avoiding obstacles, and saving time for city commuters with preset autonomous navigation routes. As major cities expand into airspace due to limited ground-level space, the low-altitude economy holds vast future potential, presenting significant opportunities for both upstream and downstream industries.

Policy support from the central government

In recent years, China has released a suite of supportive policies that have partly contributed to the rapid growth and sustained increase in aircraft and enterprises. In particular, the government has intensified efforts to support a batch of leading companies to engage in R&D to develop drone logistics and generate more low-altitude airspace resources.

In 2020, the CAAC sanctioned 13 national pilot zones in development zones, two of which focused on drone logistics and three on drone delivery in cities. In February 2021, the low-altitude economy was formally written into the national development plan for the first time. Subsequently, in 2022, the CAAC established an additional 4 civil unmanned aerial test zones and 3 civil unmanned test bases. These initiatives underscore the government’s steadfast determination and commitment to nurturing the low-altitude economy.

Bn 2023, 16 provinces had integrated concepts related to the low-altitude economy and general aviation into their government work reports. Most recently, in January 2024, the Interim Regulations on the Management of Unmanned Aircraft Flights was implemented, marking a further step for the orderly development of the sector.

Low-altitude economy in China’s local provinces

In addition to support from the central government, local governments across China are also facilitating progress in the sector.


Shenzhen stands at the forefront of China’s low-altitude economy development. With up to 1,500 enterprises related to the low-altitude economy chain, the city has achieved an impressive output of RMB 75 billion (US$10.6 billion) as of 2022.

In December 2023, the Shenzhen Municipal Bureau of Transport implemented specific measures to further enhance the high-quality development of the low-altitude economy. These measures include substantial grants of up to RMB 50 million (US$7.03 million) for emerging low-altitude enterprises. Shenzhen aims to expand its low-altitude industrial chain, projecting to include more than 1,700 enterprises with an output value surpassing RMB 100 billion (US$ 14.06 billion) by 2025. The plan also emphasizes research on key technologies, such as remote identification, perception and avoidance, 5G, and Beidou navigation, with a focus on enhancing international standards.


Guangzhou has actively participated in low-altitude economic development initiatives, hosting conferences, forums, and seminars. Recently, the city unveiled a set of measures and detailed policies aimed at promoting the high-quality development of the low-altitude economy. Among these measures is a substantial subsidy of up to RMB 30 million (US$4.2 million) designated for eligible low-altitude industry projects.

The city is making a concerted effort to forge a multi-billion-dollar industry cluster. To boost the development of the low-altitude economy, Guangzhou plans to launch the first unmanned aerial tourist sightseeing route, featuring more than 10 stations across three routes.

Other provinces

Several provinces, including Anhui, Jiangxi, and Hainan, have actively participated in low-altitude economic development conferences, forums, and seminars since September 2023. Anhui, in particular, is leading low-altitude airspace management reforms. It has become the one of the first provinces in the Yangtze River Delta to undertake such initiatives.

Challenges in the low-altitude economy

The low-altitude economy faces several challenges in establishing and promoting its growth. Unlike the established highway network, there is no pre-existing low-altitude airway network, requiring drone operators to independently navigate airspace applications, airway planning, and risk assessments. While this hinders low-altitude development, the associated infrastructure costs are comparatively lower, allowing for the utilization of rooftop spaces in urban areas.

The rapid proliferation of drone applications also raises concerns about potential public safety hazards. In this regard, the Chinese government while being supportive of the sector, recognizes the need for regulations to prevent accidents. Certain commercial drone applications are restricted in densely populated areas like Beijing and Shanghai, posing challenges to the implementation of drone delivery methods.

Moreover, while the low-altitude economy is a highly contested frontier among major global economies, the Chinese drone market is witnessing an influx of new players, which could lower average drone prices in the upcoming years. Investors and industry participants eyeing entry into China’s drone industry must be mindful of the escalating competition in this dynamic market.

In addition, drones have become entangled in US-China tensions, notably with Shenzhen-based DJI dominating the US market. DJI, the world’s leading drone manufacturer, facing scrutiny in the US, was put on the country’s investment blacklist in 2021.

In July 2023, China announced export controls on drone and drone equipment to safeguard national security and interests. These restrictions, effective from September 1, 2023, mandate vendors to seek permission for exporting specific drone components and systems, including engines, lasers, imaging, communications, radar gear, and anti-drone systems. Consumer-grade drones meeting certain specifications are also subject to these controls.

How can investors participate in China’s low-altitude economy?

The low-altitude economy signifies a visionary leap into the digital age, leveraging the capabilities of information technology and intelligent systems. Beyond a mere economic sector, it embodies a strategic move towards innovative urban development, positioning itself as a prime investment opportunity. This burgeoning sector not only promises high returns but also stands as a catalyst for groundbreaking advancements in urban infrastructure and services.

As cities grapple with escalating congestion at the ground level, the low-altitude domain emerges as a new frontier for unparalleled growth and innovation. Investing in China’s low-altitude market entails tapping into a transformative landscape where technology, infrastructure, and urban development converge. The commitment to technological advancement showcased in this sector underscores China’s pivotal role in shaping the future of global transport and logistics.

Companies looking to invest in China’s low-altitude market should consider strategic partnerships, technology collaborations, and participation in government-backed initiatives. Engaging with local stakeholders and aligning with the regulatory framework will be crucial for navigating this dynamic and rapidly evolving landscape. The potential for innovation and the promise of reshaping urban dynamics makes the low-altitude economy an enticing prospect for forward-thinking investors who want to be at the forefront of the next era in transportation and urban development. Their experiences in the China market could later equip them to be first-movers closer to home or in other emerging markets.

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