China's Low Altitude Economy! Best in the World!

Futuristic scenarios of autonomous air taxis for local transport and cargo transport by drones is quickly becoming a reality in China.

This is due to the Chinese Government encouraging the development of the Low Altitude Economy.

The term “low-altitude economy” refers to a spectrum of economic activities occurring within low altitude airspace, within 1000 meters above ground. Two key engineering innovations are driving this advancement: Unmanned Aerial Vehicles (UAVs) and Advanced Air Mobility (AAM) vehicles.

UAVs range from small drones to larger, complex aircrafts, while AAM vehicles, such as eVTOLs (Electric Vertical Take-Off and Landing), are designed for urban air mobility. Their ability to vertically take off and land like a helicopter enable them to work well in congested cities.

China has a population of 1.4 billion and several major cities such as Shenzhen, Dongguan, Shanghai and Beijing rank among the world’s top 20 for highest density. There is a very urgent need for the easier movement of people, goods and services and in 2021 the Chinese Government wrote the low altitude economy into the National Development Plan for the first time. In 2020 China had built 5 national development zones dedicated to advancing drone logistics, optimizing flight routes, and prioritizing safety. In 2022, they further expanded their drone infrastructure with 4 additional test zones and 3 test bases for certification and testing of drones.

16 provinces have integrated concepts related to the low altitude economy into their government work reports and they have all done well to develop this industry. However the Guangdong Province that includes the cities of Guangzhou, Shenzhen and Zhuhai has become the most advanced.

The Guangdong Province is a world leading hub for the low altitude economy, with a projected economic scale exceeding RMB 300 billion (US$41.4 billion) by 2026.

AutoFlight (an eVTOL aircraft developer) has already completed the world’s first intercity test flight between Shenzhen and Zhuhai in Guangdong, reducing a 3 hour car journey to just 20 minutes in its eVTOL called Prosperity.

Another company from this province EHang has completed test flights of its eVTOL called EH216-S in Saudi Arabia, Dubai and Brazil. It has delivered 263 of these flights and they are mainly used in the tourism industry for aerial sightseeing in different parts of China.

The global public flight debut of the manned flying car of Xpeng Aeroht will happen at the 2024 Airshow China in November . A 180,000 sq.ft. factory that will produce 10,000 of these per year is already ready in Guangdong.

The city of Guangzhou has allocated substantial resources, including a notable subsidy of up to RMB 30 million (US$4.2 million), to support eligible low-altitude industry projects. This city also plans to build an unmanned aerial tourist sightseeing route, which will feature over 10 stations across three routes. Local enterprises that secure Type Certificates (TC) and Production Licenses (PC) from the CAAC for large manned or unmanned aerial vehicles will receive a one-time subsidy of RMB 15 million (US$2.06 million).

Shenzhen has 1500 enterprises related to the low altitude economy chain and grants upto RMB 50 million (US$7.03 million) for emerging low-altitude enterprises. It 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. It has already established 126 low-altitude routes and built 89 drone takeoff and landing sites.

Zhuhai offers substantial support for major projects, including subsidies of up to 20 percent for equipment purchases and factory rents related to low-altitude manufacturing. Companies that achieve airworthiness certifications for their aircraft are eligible for substantial rewards, ranging from RMB 500,000 (US$68,733) to RMB 10 million (US$1.37 million), depending on the type and size of the vehicle.

Another important aspect of the low altitude economy is drone transport of cargo. China has made significant advances in this too and the HH- 100 drone developed by the Aviation Industry Corporation of China (AVIC) can carry a payload of 700 kg and has a range of 520 km at a maximum cruise speed of 300 km/h. Food delivery by drone has now become common in Shenzhen thanks to the Chinese company Meituan which made 100,000 drone deliveries in 2022. Another company Phoenix Wings delivers fresh fruits over a distance of 600 km from Hainan to Guangdong using drones. They claim this way is 70% faster and 30% cheaper than conventional methods.

China is currently the world leader in this industry because it manufactures all the components domestically, electric batteries which is the petrol of this industry is available at a reasonable rate in China compared to the rest of the world. Also credit should be given to the Chinese Government for relaxing airspace regulations and making testing and certification of these vehicles cheap. According to Tencent Research Institute, it costs US and European companies at least US$2 billion to obtain certification and mass produce eVTOL aircraft, while it would cost US$1 billion in China.

China not only has easier and more economical access to the compnents and raw materials that power this industry but the Government also supports it so they will continue to be world leaders in this industry.