Growth Above the Ground
Propelled by the synergy of policy, technology, and market demand, the low-altitude economy has emerged as a powerful driver of high-quality development in China. This burgeoning sector is reshaping traditional industries while forging new strategic pathways for China to excel in the global competitive arena.
In recent years, the sector has experienced rapid expansion. By 2023, China’s low-altitude economy surpassed 500 billion yuan ($68.6 billion), with an annual growth rate of 33.8 percent, according to the China Centre for Information Industry Development. So far, over 20 provincial-level governments in China have launched initiatives to promote the low-altitude economy, with many cities recognising it as a new engine for economic growth.
Shenzhen, home to more than 1,700 companies in the low-altitude industry, is a leader in this space. The city boasts a fully integrated drone industry chain, providing around 70 percent of the world’s consumer-grade drones and 50 percent of industry-grade drones. Shenzhen is also at the forefront of pioneering low-altitude travel and logistics solutions, which have not only reinforced its status as a tech hub, but also injected new momentum into its innovation-driven economy.
The low-altitude economy is driving growth across a wide range of sectors, beyond equipment manufacturing and transportation. Key upstream industries, such as high-energy-density batteries and carbon fibre composites, are experiencing rapid growth. Additionally, industries essential for the safe and smooth operation of the low-altitude economy, such as navigation, communications, and airspace management, are also benefitting. Innovative industry integrations are also noteworthy. For example, drones are being used for agricultural tasks like pesticide spraying and fertiliser distribution, as well as monitoring livestock. These applications are significantly reducing labour costs and increasing efficiency. The tourism sector, too, may benefit from low-altitude vehicles enhancing the visitor experience in remote locations and scenic spots.
Global ambition
China’s low-altitude economy presents a unique opportunity to gain a competitive global advantage. Despite gaps with developed countries in areas like general aviation, China is well-positioned to catch up, bolstered by its robust research and development, and manufacturing capabilities, alongside growing policy support. China is already a global leader in drone technology, and it is making significant strides in urban air mobility - arguably the most futuristic aspect of the low-altitude economy, where intense global competition is underway.
Moreover, the low-altitude economy is expanding China’s economic and trade cooperation with other regions. In Africa, for instance, drones and light aircraft are helping to address pressing needs such as medical aid, emergency response, and short-distance logistics. This has made the low-altitude economy an increasingly important vehicle for China-Africa cooperation.
Despite its promising future, the low-altitude economy in China faces several challenges. These include insufficient infrastructure, absence of established business models, and a relatively small consumer base for general aviation. However, China is committed to addressing these shortcomings. In March 2024, the Ministry of Industry and Information Technology, along with three other ministerial-level departments, released a plan to accelerate the innovation and application of general aviation equipment. The goal is to fully integrate general aviation equipment into all areas of daily life and production, creating a market worth over 1 trillion yuan ($138 billion) by 2030.
As the low-altitude economy continues to soar, China is not only reshaping its own industrial landscape but also positioning itself as a global leader in this exciting new frontier. With sustained investment in infrastructure, innovation, and policy support, China is poised to unlock the full potential of this sector, creating new opportunities for growth, efficiency, and international collaboration.
