China’s low-altitude economy (低空经济 in Chinese) designates all civil economic activity enabled by manned and unmanned flight operations in airspace generally below 1,000 metres, extending to 3,000 metres in designated corridors. The scope encompasses drone logistics, agricultural UAVs, industrial inspection, eVTOL passenger transport, and low-altitude tourism. The sector was included in China’s central government work report for the first time in 2024. It was then elevated to a strategic emerging industrial cluster in the 15th Five-Year Plan (2026–2030). As such, the sector has attracted sustained public and private capital. It is advancing toward commercialization at a pace that outpaces comparable efforts in Western markets.

China’s low-altitude economy: Strong market traction and structural tailwinds

Total market size projections for China’s low-altitude economy vary by methodology, but the directional consensus is consistent. The Civil Aviation Administration of China (CAAC) projects the sector is estimated to reach RMB 1.5 trillion (approximately USD 211 billion) in 2025, rising to RMB 3.5 trillion by 2035. Within the broader ecosystem, the civilian drone sub-sector alone is projected to reach RMB 1,761 billion in 2025, scaling to RMB 4,025 billion by 2030. The eVTOL segment, which is at an earlier stage and further from mass commercialization, is forecast to reach RMB 9.5 billion in 2026. In 2025, eVTOL annual order value exceeded RMB 30 billion, according to industry data cited at the Second China eVTOL Innovation Development Conference.

The broader market is corroborated by operational metrics. In 2025, registered drones reached 3.28 million units, a 20% year-on-year increase. Meanwhile, the cumulative flight hours reached 45.3 million, growing nearly 70% year-on-year. Enterprise formation reinforces the trajectory: approximately 89,000 active enterprises are now registered in related sectors. Moreover, with 11,700 new registrations in the first five months of 2025 alone, it is a 220% year-on-year increase.

Going from framework to implementation

Growth in China’s low-altitude economy is structurally driven by three converging forces: an increasingly codified policy framework, maturing technology, and an expanding set of validated commercial use cases.

Governing policies and standards

The policy architecture has moved decisively from headline designation to operational regulation. The 15th Five-Year Plan explicitly lists the low-altitude economy as a strategic emerging industry. At the legislative level, a revised Civil Aviation Law, effective from July 1, 2026 onwards, introduces a dedicated “development promotion” chapter for the first time. This establishes tiered airspace management rules below 300 metres, and creates a regulatory framework specifically for eVTOL and other new operating models. Complementing this, two mandatory national standards which cover UAV operational identification and real-name registration will take effect May 1, 2026. This establishes a “one aircraft, one code, full traceability” regime that resolves the “black flight” enforcement gap that has constrained scale operations. Ten ministries jointly published the Low-Altitude Economy Standards System Construction Guide (2025 edition) in February 2026, targeting a fully established standards system by 2027 and over 300 sector-specific standards by 2030.

Regulatory velocity

China’s CAAC has maintained a deliberate certification acceleration relative to Western counterparts. EHang achieved CAAC type certification in 31 months using 40,000 test flights, compared to FAA and EASA timelines of five to seven years or longer. In March 2025, EHang’s EH216-S obtained its Air Operator Certificate, completing the world’s first full “four-certificate” commercial eVTOL certification, namely, type, production, airworthiness, and operator. The National Development and Reform Commission’s “three firsts, three laters” principle (cargo before passengers, segregated before integrated airspace, suburban before urban) signals that this pace is deliberate and sequenced, not indiscriminate.

Technology foundation and ecosystem

Approximately 75% of eVTOL components are direct extensions of China’s new energy vehicle supply chain.

Solid-state battery development with manufacturers including CATL, CALB, and EVE Energy, all in mid-scale trial production of aviation-grade cells. The progress toward 2026–2027 small-batch production, targeting energy densities of 300–500 Wh/kg, will materially extend eVTOL range beyond current 30-kilometre constraints.

Market segmentation in China’s low altitude-economy

It is best understood as a three-layer industrial chain: upstream aircraft manufacturing, midstream infrastructure and air traffic management, and downstream commercial operations. Value distribution across these layers is uneven and will shift as the market matures.

Across the downstream operations layer, five application verticals currently define the market:

Logistics

Drone logistics is the most commercially developed vertical. The market has stratified around three operators with distinct strategic positions. Meituan, which began exploring drone delivery in 2017 under its “retail + technology” strategy. The company had deployed 65 routes across Shenzhen, Shanghai, Beijing, and Guangzhou by November 2025. It had completed over 740,000 commercial orders, a scale ranking among the largest globally.

International expansion is advancing in parallel: Meituan’s urban low-altitude logistics solution received Dubai Civil Aviation Authority certification in 2024 and commenced commercial operations there, with its first regular route in Hong Kong launching in June 2025. In December 2025, the company launched a new “low-altitude aviation network” operating model. It also released its fourth-generation long-range drone, a smart relay airport, and a third-generation intelligent dispatch system. This shift from individual route operations toward an integrated network architecture. Night delivery is now operational in Shenzhen, with order volume doubling shortly after the September 2025 launch.

SF Express subsidiary, Feng Wing Technology, leads in operational volume. It has achieved 1,400 cumulative routes, 290,000 sorties in 2025 (up 26% year-on-year), and 5.9 million items transported. It has a core hub in Shenzhen, operating nearly 200 aircraft across 400 routes and 1,000 landing positions. JD Logistics dominates rural and provincial coverage, connecting remote villages through a three-tier logistics architecture. Tianjin Binhai New Area’s dedicated low-altitude medical express corridor has reduced cross-district transport time for blood products and emergency pharmaceuticals from one hour to 18 minutes. It became a use case that illustrated the B2G opportunity extending well beyond commercial parcels.

Agricultural UAVs

It represents the largest footprint by geographic scale. Agricultural drone stock exceeded 300,000 units in 2025, a 20% year-on-year increase, with operational coverage surpassing 3 billion mu, up 12% year-on-year. Power line inspection by UAV now covers over 4 million kilometres of electrical infrastructure annually. A figure that has effectively displaced traditional human patrol in large-scale grid maintenance.

Industrial inspection and public services

This is a high-growth B2G vertical. Drone-based inspection of photovoltaic installations achieves defect identification accuracy above 95%, with applicability across extreme weather conditions. The vertical is expanding into forest fire detection, geological survey, and maritime monitoring, driven by government procurement mandates.

Low-altitude tourism

It is an emerging consumer vertical. Scenic area operators, desert parks, and coastal destinations are integrating eVTOL sightseeing, powered paragliding, and aerial tours into visitor offerings. Heilongjiang’s winter tourism zone recorded significant low-altitude activity. This illustrates that this vertical is no longer confined to warm-weather destinations or southern China.

Urban air mobility

This segment remains the earliest-stage vertical but is accelerating materially. The Shenzhen–Zhuhai cross-city eVTOL route is expected to launch in 2026. It has a single-leg flight time of approximately 20 minutes and per-seat pricing projected at RMB 200–300. XPeng AeroHT (rebranded as Aridge) has accumulated over 7,000 global pre-orders for its flying car. Its mass production and delivery are scheduled for 2026. As such, 2026 is expected to be a landmark year for eVTOL certification and production. Multiple leading models are anticipated to complete type certificates and enter scaled delivery.

Local nuances of China’s low-altitude economy

Several structural factors distinguish the development of the low-altitude economy in China from equivalent initiatives in other markets and warrant explicit consideration in any strategic assessment.

The transition underway in 2026 is significant: mandatory UAV identification codes, a revised Civil Aviation Law, and the ten-ministry standards guide together create the enforcement infrastructure that will enable operations at a genuine national scale. Prior to this, much of China’s low-altitude activity operated under provisional permissions; the new regime establishes permanent rules of the road. Leading companies, including Meituan and ZTE, are active participants in drafting these standards. This institutional arrangement advantages incumbents in shaping rules that govern their own operations.

Regional clustering with distinct industrial identities

Three dominant regional clusters have emerged with meaningfully differentiated strategies. The Yangtze River Delta, led by Shanghai, is positioning itself as the global eVTOL manufacturing capital. The region targets 500+ new aircraft in annual batch production and a core industry scale of RMB 80 billion by 2028. This is anchored by a cluster including Autoflight, Volanthe, and Wolar. The Greater Bay Area, anchored by Shenzhen and Guangzhou, prioritises comprehensive deployment.

This consolidates the “drone manufacturing capital of the world” position while building out the most advanced urban low-altitude infrastructure globally, including the SILAS intelligent airspace fusion system and Guangdong’s 3,592 landing facilities as of end-2025, growing to over 6,000 in 2026. The Sichuan-Chongqing region is developing mountainous low-altitude applications, with Chongqing targeting an integrated urban air traffic management system by 2026 and 1,500 new take-off and landing points by 2027 to achieve rural village-level connectivity.

Infrastructure as a government-led investment cycle

2026 represents a concentrated infrastructure construction period rather than an organic accumulation of private-sector investment. Shenzhen’s commitment to 1,200+ landing points (already surpassed with 1,284 completed by the end of 2025), Suzhou’s 200+ vertiports, and Shanghai’s 5G-A low-altitude communications network covering continuous flight corridor connectivity. These were all scheduled for 2026 completion, which represents government-orchestrated capital allocation on a scale and coordination that has no equivalent in Western markets.

Provincial target credibility continues to warrant scrutiny. Several provincial announcements have produced mathematically implausible aggregate figures. Analysts should distinguish between jurisdictions with concrete construction schedules and regulatory frameworks across Shenzhen, Guangzhou, Suzhou, Hefei, and those making headline announcements without commensurate institutional follow-through.

Key trends and challenges of China’s low-altitude economy

The regulatory transition from provisional to permanent

The simultaneous implementation of the revised Civil Aviation Law (July 2026) and mandatory UAV identification standards (May 2026), alongside the ten-ministry standards construction guide, represents the most consequential regulatory shift since the sector’s designation. Operations that have relied on provisional permits will require re-compliance. Companies that have participated in standard-setting are structurally advantaged in this transition.

Nighttime and all-weather operations are normalizing

Meituan’s fourth-generation drone operates across temperatures from -20°C to 50°C, moderate rain, snow, and winds up to level six. Night delivery services launched in Shenzhen in September 2025, with order volume doubling shortly after launch. LiDAR-based navigation enabling precise flight without satellite or visual dependency is being integrated at scale. This removes the last major operational constraint on route economics.

eVTOL entering scaled commercial operations

2026 is explicitly identified by industry analysts and government publications as the year multiple eVTOL models complete type certificates and enter scaled delivery. Cumulative confirmed and intent orders across leading manufacturers. For instance, the orders from XPeng AeroHT (7,000+), Volanthe (1,920+), EHang EH216 series (1,000+), and AutoFlight V2000CG (2,000+) indicate substantial near-term demand, though conversion from intent to confirmed orders at volume remains the key variable to monitor.

International commercialization is accelerating from a Chinese industrial base

EHang has conducted operational demonstrations in the UAE, Japan, and Southeast Asia, and launched passenger eVTOL operations in Thailand. XPeng AeroHT debuted in Dubai, generating 600 regional orders. TD550 unmanned helicopters from United Aircraft Group set a record for Chinese enterprises at the Dubai Airshow with 1,600 orders. The pattern is consistent: Chinese manufacturers are accumulating international operational data and distribution relationships while accumulating the certification credentials required for regulatory approval in export markets. This sequencing positions them as standard-setters, not followers, in the global low-altitude economy.

Headwinds across regulatory, infrastructural, and technological domains

Despite its vast potential, China’s low-altitude economy faces certain hurdles. A primary challenge is regulatory fragmentation, as airspace management remains complex. It has slow approval processes and a lagging legal framework that struggles to keep pace with new aircraft types. This is compounded by inadequate infrastructure, including a shortage of takeoff and landing sites and supporting surveillance networks. Technological bottlenecks, particularly limited battery life and safety concerns, further restrict scalability. Finally, nascent business models and high operating costs hinder the path to profitability, making widespread commercialization difficult to achieve.

Capital, clusters, and certifications: Inside China’s low-altitude economy ascent

• The Yangtze River Delta (led by Shanghai) focuses on eVTOL manufacturing; the Greater Bay Area (Shenzhen–Guangzhou) prioritizes comprehensive urban deployment and infrastructure; the Sichuan-Chongqing region specializes in mountainous and rural applications.
• The sector benefits from a codified policy framework, including a revised Civil Aviation Law and mandatory UAV identification standards that enable scaled operations.
• It reached RMB 1.5 trillion in 2025, with projections of RMB 3.5 trillion by 2035. Registered drones hit 3.28 million units in 2025, while flight hours grew nearly 70% year-on-year.
• China has outpaced Western counterparts in eVTOL certification, with EHang completing the world’s first full “four-certificate” commercial approval. A sequenced “cargo before passengers” approach balances speed with safety.
• However, regulatory fragmentation, inadequate infrastructure, technological bottlenecks (particularly battery life), and nascent business models with high operating costs continue to hinder widespread commercialization.