The Low-Altitud Economy
in China: an introduction
In brief
The low-altitude economy should not be understood simply as a new drone market. Its real significance lies in the way near-ground airspace is beginning to become a new operational layer of the economy: a layer where navigation, sensing, logistics, automation, energy, software, and industrial capability converge within a shared execution architecture. In China, this logic is already starting to become visible with considerable clarity.
Introduction
For decades, the airspace below one thousand meters was, from an economic point of view, essentially empty. A space reserved for helicopters, occasional emergencies, and recreational use. That image is beginning to fade, and in China faster than anywhere else.
This article explains the logic behind it, the model China is building, and what all of this implies for Europe. If you have not yet read the first piece in this series — where the direct experience of flying in Hangzhou serves as a practical entry point into the concept — that is a good place to start before continuing here.
What exactly is the low-altittude economy?
A broader definition than it seems
There is no universally accepted definition, but there is a growing technical and operational consensus, driven largely by the Chinese regulatory framework. In general terms, the low-altitude economy — or Low-Altitude Economy (LAE) — refers to the set of economic activities that use airspace below 1,000 meters for operations involving both manned and unmanned aircraft.
That space, which until recently seemed of little economic use, is beginning to be seen as an additional network for transporting, inspecting, measuring, responding to emergencies, and managing territory more effectively. Just as a road network is not merely asphalt but a structure that connects activities and reduces time, nearby airspace is beginning to emerge as a more flexible and, in certain contexts, more efficient operational layer than existing alternatives.
The drone as a modular platform, not a closed product
A common mistake in analyzing this field is to treat the drone as a closed product category. It is not. As in robotics — as I explored in my article on robotic execution architecture in China — the drone is best understood as a modular, reconfigurable platform. Its basic structure may remain relatively stable, while payload, sensing, autonomy, connectivity, and final function vary enormously depending on the use case.
That is why the same technical principle can produce radically different configurations. The same drone can transport an urgent delivery in an urban environment, inspect a dam, spray crops, illuminate a nighttime rescue operation, or lift a person into the air. What matters is not the device itself, but the range of functions it can support.
At what altitude does the low-altitude economy actually operate?
The main operating space stretches from ground level up to 1,000 meters, although depending on terrain and local regulation it can extend to 3,000 meters. Within that space, low-altitude air traffic management systems work with different layers according to aircraft type, system autonomy, and operational risk. In practice, most logistics and governance operations take place below 300 meters.
The convergence changes everything
The low-altitude economy did not arrive overnight. It is the result of the simultaneous maturation of four developments that, on their own, would not have been enough.
The first is the maturity of electric propulsion, which has significantly reduced both costs and operational complexity. The second is the miniaturization of perception systems: optical cameras, thermal sensors, LiDAR, and infrared systems that allow drones not only to move, but also to interpret their surroundings with growing precision. The third is progress in autonomous navigation software and air traffic management, making it possible to coordinate multiple aircraft in the same airspace without collisions. The fourth is the development of dedicated regulatory frameworks that are beginning to define how, where, and under what conditions these systems can legally operate.
It is the combination of these four factors that allows us to speak of a sector with real deployment potential, rather than just a collection of promising technologies viewed in isolation.
key idea
The real leap does not lie in drones flying more, but in near-ground airspace beginning to be used as a strategic infrastructure.
The chinese model: from industrial policy to deployed infrastructure
A state priority, not just a market opportunity
In China, the low-altitude economy is not merely a market bet. It is a state priority backed by explicit industrial policy. The sector was included for the first time in the Government Work Report in 2024 and again in 2025. That same year, it was incorporated into the proposals for the 15th Five-Year Plan (2026–2030). This is not a niche experiment, but a field in which the government has decided to build leadership systematically, combining regulation, public investment, and industrial density.
The scale is backed by the numbers. According to the Civil Aviation Administration of China (CAAC), the value of the low-altitude market reached RMB 1.5 trillion in 2025 and could exceed RMB 3.5 trillion by 2035. The number of registered drones reached 3.28 million units by the end of 2025, up 20% on the previous year, while cumulative flight hours grew by nearly 70% year on year.
Shenzhen as a laboratory: concrete data
The clearest example of what it means to manage low-altitude airspace as real urban infrastructure is Shenzhen. The city introduced specific regulation for the low-altitude economy in February 2024, becoming the first city in China to do so, and deployed the SILAS platform: a dynamic airspace management system in which operators request flight permissions and the system automatically analyzes conflicts and allocates space.
The results are concrete. In 2024, Shenzhen had 203 active urban air mobility routes and 121 takeoff and landing points. The sector included more than 1,900 companies and generated industrial output of over RMB 21.38 billion, with year-on-year growth of 26.4%. This is not a pilot project. Guangdong Province is scaling the model across its territory.
The EHang case: what a record certification process reveals
One of the clearest indicators of this field’s maturity in China is EHang’s trajectory. In March 2025, the company completed the full certification cycle for its EH216-S eVTOL: type certificate, production certificate, airworthiness certificate, and finally air operator certificate. It was the first company in the world to achieve this, with commercial flights already in operation in Guangzhou and Hefei.
The process took less than 31 months. European (EASA) and American (FAA) regulators estimate timelines of between five and seven years for equivalent processes. The difference cannot be explained by political will alone. It reflects the density of the industrial ecosystem surrounding development: regulation and industry moving in the same direction at compatible speeds. That, in itself, is a structural advantage.
How much is the low-altitude economy market worth in China
The value of the industrial chain reached RMB 506 billion in 2023. It is expected to exceed RMB 1 trillion in 2026 and reach RMB 3.5 trillion by 2035. These are figures that position the field not as a technological niche, but as a new component of national economic infrastructure.
These projections coexist with an operational reality that remains uneven. The low-altitude economy is not equally developed across the country. What can be observed in Shenzhen, Hangzhou, or Shanghai is qualitatively different from what exists in second- or third-tier cities. But the direction — and the speed — are clear.
What should Europe take from this?
U-Space, EASA and the real gap
Europe is not starting from zero. The European Union Aviation Safety Agency (EASA) has developed the U-Space regulatory framework for low-altitude drone operations, and in Spain the first cities — Benidorm and A Coruña — are implementing it through Enaire’s Welcome project. The 2026 regulatory update from AESA aims to harmonize operational scenarios across Europe with stricter requirements for advanced operations.
But there is a real gap in execution speed. Certifying an eVTOL in Europe takes between five and seven years. In China, EHang did it in 31 months. That difference cannot be explained by resources alone. It reflects how the relationship between regulators, manufacturers, and the industrial ecosystem is organized. In China, they move in the same direction and with minimal friction. In Europe, the processes exist, but they remain more fragmented.
The main question for European insitutions
The critical question for a European public administration or company is not whether this field will become relevant — it already is — but what kind of institutional and industrial architecture it wants to build in order to take part in it. The point is not to copy the Chinese model, but to understand which execution principles might be transferable to the European context and which might not.
That question becomes even more concrete when the analysis shifts from mobility to governance. Drones do not only move people and goods. They also perceive, interpret, and transmit information about the environment. That is the terrain explored in the article on the role of drones in smart governance.
One final thought
The low-altitude economy does not simply point to a new generation of drones. It points to a different way of building logistics, territorial, and industrial capacity: more aerial, more flexible, and more closely integrated with the real needs of the territory.
Once nearby airspace stops being empty and starts operating as infrastructure, the implications go far beyond transport. And those implications are already beginning to take shape — in more concrete ways than many people assume — in some Chinese cities.
Contact us if you want to learn more about these technologies and the ecosystem that supports them.
