What is going on in China? The growth of the low-altitude economy

Often dismissed by sceptics in the West as less stringently regulated and therefore not as safe, China’s low-altitude economy has been growing rapidly. But how does it compare with similar work elsewhere in the world?

When the Communist Party of China put its 14th five-year plan into action back in 2021, it was already a considerable way through its vision to reform domestic aviation. Today, the work completed over the past four or so years, in tandem with a world-leading battery supply chain, has cemented that change and potentially created a basis to begin establishing China as a global “low-altitude” leader.

A brief history post-2010

Progress sprouted from reforms initiated back in 2010 with the Opinions on Deepening the Reform of China’s Low-Altitude Airspace Management which looked to unlock low-altitude resources and enhance airborne aviation. This was followed up in 2021 with the National Comprehensive Three-Dimensional Transportation Network Planning Outline that formally launched the low-altitude economy (LAE) concept and expanded upon the 2019 Outline for Building China’s Strength in Transport. All of which aligns closely with China’s latest five-year plan between 2021 and 2025.

Before this, less than 30% of Chinese airspace was allocated for civilian use with the People’s Liberation Army controlling the remainder. But since the first reforms in 2010 that has gradually been expanded.

On the back of Opinions on Deepening the Reform of China’s Low-Altitude Airspace Management, the State Council and Central Military Commission launched a pilot programme to open airspace below 1,000m for general aviation in select regions. The programmes were then expanded in 2015 to other regions such as the Pearl River Delta, including megacities like Guangzhou, Shenzhen and Zhuhai. Civilian operators were also given more flexibility over filing flight plans and gaining approvals.

Next, in 2018, central government introduced reforms that further simplified flight plan processing – including greater autonomy for local aviation authorities and encouraging those same authorities to create low-altitude (below 3,000m) corridors for general aviation, including drones, helicopters and private aircraft.

By the early part of this decade, China had continued to increase the availability of low-altitude airspace to accommodate the arrival of unmanned aerial vehicles (UAVs), crewed eVTOL aircraft and other forms of AAM. The government also continued to give local authorities greater authority to manage low-altitude airspace and engage with domestic stakeholders to encourage growth in their respective regions. Arguably similar to the state initiatives active in the US, but with a more integrative approach led by central government.

The central government does not control execution, but focuses instead on pulling regional and local resources together in a systematic way. “This is dramatically different from the past,” says Haowei Bai, managing partner at Beijing-based investment firm Innolink. “One needs to understand this approach in order to accurately forecast China’s LAE progress and strategic competitiveness.”

From an 80:20 military to civilian airspace starting point, data from China’s National Key Laboratory on Airspace Technology indicates that the current allocation has shifted to approximately 32% for civil aviation and 23.5% for military use, with the remaining airspace underutilised or allocated for other purposes.

China is now home to dozens of startup companies developing uncrewed cargo aircraft and electric air taxis at unprecedented speeds.

Jeffrey Lowe, CEO of Asian Sky Group says the most recent effort to rollout the low-altitude economy builds on the learnings taken from the initial push in 2010 to 2015 period.

“This isn’t the first time low altitude has been a priority in China,” he says. “Back in 2010 to great fanfare the Chinese government and the Central Military Commission approved the Chinese aviation regulator’s Low-altitude Airspace Management Reform Guidance, which was to gradually open low-altitude airspace below 4,000m across the country’s five aviation control areas by 2015.” 

The move was part of plans to boost China’s general aviation market and its was predicted that the domestic private aircraft market would expand by 20% to 25% annually over the following 10 years (2010-2020).

“Well we all know that didn’t happen, even though a lot of new GA airports were invested in – kind of like all money being poured into eVTOLs. Just because you open up the airspace, this doesn’t necessarily lead to more flights and expansion. You need to do a ton of other things too to make access to that low altitude possible. I remember talking to general aviation pilots and operators years later and them all saying it made no difference at all.” 

A big part of that was the flight approval process, says Lowe. Some flights under the new regulations needed approvals but, at a bare minimum, the flight needed to be reported. However, this could only be done at an air service station of which, at the time, there was typically only one per aviation control area. Also, an operator needed to either obtain an approval from or report to each province along the route. For example, a flight from Guangzhou to Beijing required three or four additional overflight permits.

Opening up the airspace is an ongoing process. Hangzhou’s Municipal Development and Reform Commission released a draft action plan in April 2025 that includes proposals to open up 100 new low-altitude routes and 30 international air routes by 2027. Elsewhere, China’s military aviation authority is permitting expansion of low-altitude airspace in Anhui Province, authorising 30 new temporary flight zones and 27 additional routes. Operators can now use these routes for services including cargo and aerial sightseeing.

Direction from on high 

Sergio Cecutta, founder, SMG Consulting says: “At the beginning of last year the government added the low-altitude economy as a priority for the Chinese economy – as what they call a growth initiative. It is the same process as they have taken for chips, solar panels and EVs [electric ground vehicles]. Now this priority is being filtered out to the different provinces.”  

But once the provincial machine is in motion, how does the local authority benefit the industry? In the US, for example, the provider of capital – investor, government etc. – will give a company some money towards its testing facility. However, in China the local authority will assign the land, build the facility, potentially even install revelant machinery and staff it, before handing over the keys for rent as low as cents per square metre. As of early 2025, almost 30 provincial and municipal governments have issued development plans and targets in support of the low-altitude economy.

“Whilst provinces need to and want to implement the message from central government, there is another reason why they are eager to get involved,” says Cecutta. “As much as one third of the Chinese economy had relied upon provinces selling land to developers to build homes. But that engine has now slowed down considerably and provinces have started looking for new ways to replenish their coffers. That is why we see them latching on to the low-altitude economy.” 

Another source of support is clearly evidenced when looking at orders placed for aircraft in development. Government entities and state-owned enterprises (SOEs) represent 30-50% of customers for all orders placed for Chinese aircraft. This allows the government to, in effect, subsidise companies with aircraft in development through functions like pre-delivery payments. According to Innolink’s Bai, government entities can now buy directly from OEMs: “This delineation is important because focusing on SOEs and their use cases instead of government entities is a critical part of the equation to estimate LAE scale and growth rate.”

Cecutta adds: “Alongside the AAM testing grounds, or parks, and the subsidisation of ticket prices – which varies from province to province and even from city to city within a province – this is a general overview of how the government is helping to foster the development of the low-altitude economy.”

The interconnectedness of the ecosystem 

Centralised government is generally a defining feature of all communist nations, so the growth arc of the low-altitude economy in China should not be a surprise. But the interconnected nature of the Chinese ecosystem extends further than bureaucratic directives.

“Amid China’s ongoing aviation policy reforms, government-industry-higher education collaboration is on the rise,” says Jennifer Meszaros, international consultant and founder of China eVTOL News. “The process follows a top-down approach, starting with the central government, followed by provincial governments that are responsible for releasing their plans. 

“Following the plans, next come the measures, and really measures means subsidies and other support, such as airspace prioritisation.” 

For example, back in February, Hainan Provincial Department of Transportation released a draft for public comment on measures to support the growth of the low-altitude economy in the region. The draft highlighted 18 initiatives across six areas including: improving infrastructure, easing low-altitude operations and growing the number of air routes and platforms. Potential subsidies include a maximum of 20m yuan ($2.7m) per airport project and annual subsidies of up to 25m yuan for new and upgraded low-altitude projects.

The draft follows a number of similar initiatives in other provinces including Guangdong, Zhejiang and Sichuan. In fact, since central government officially put its weight behind the low-altitude economy, every administrative region in China has adopted a related policy in some form.

“What we are seeing now is the provincial, district and county/city governments all following suit,” says Meszaros. “Then these players go out and form industry-government alliances to work together because not one company can work on all the aspects of the low-altitude economy. Moreover, we are seeing interesting tie-ups with some of China’s top universities with automotive departments. Higher-learning entities are also releasing low-altitude degrees and specialised courses spurred by government backing.”

The landscape is changing though. Since October last year, central government has begun introducing government-backed venture capital investment funds as well as subsidies. This is important to know because the amount of available capital is considerably larger than subsidies, and a more stringent investment decision process should help to promote high quality development of the industry.

According to Innolink’s Haowei Bai, many key players in China’s low-altitude economy industry previously worked on major commercial aviation programmes and now lead private ventures. Since the Commercial Aircraft Corporation of China (COMAC) was founded in 2010, it has focused on commercial programmes, whilst government research institutes have mostly focused on defence programmes.

“This is key to allowing people to understand the power and influence of commercialisation and supply chain established by this process. It will definitely help the low-altitude economy,” says Bai.

“Also, there are a limited number of people who have worked in commercial aviation in China, pretty much driven by past programmes – COMAC’s C919, ARJ21, AG600 and other commercial aircraft programmes. These people all know each other very well because they used to work together.”

This means that the ecosystem is often tightly interconnected, with SOEs and private companies working closely on technology development. Also, when startups are launched, they have to interact with economic and industry development agencies of local government, forming close ties over time.

This is a key enabler of the ecosystem because Chinese startups are not necessarily well connected with universities and government research institutes. This creates a disconnect between the work carried out at these institutions and wider market and socioeconomic growth.

“Overall, this is a crucial point: innovation and entrepreneurship in the open market surpasses the traditional government-initiated R&D in driving social economic advancement in China. This is a main reason why government backed venture capital investment is encouraged from a resource allocation perspective,” he explains.

‘Not all peachy’

Despite efforts from on high, private and public sector collaborations in China are not always simple to execute, says Teo Hui Ling, founder of Beyond Horizons a specialist legal team delivered by Bethel Chambers.

“You have to remember that China has a lot of provinces, and each province have their own key performance indicators and compete with one another. So it is interesting news when you hear of a collaborative project such as [Liaoning General Aviation Academy’s electric aircraft] RX4E, but doing this at scale is a different challenge. To have any real commercial impact, meaning creating two or three aircraft model types that are within the low-altitude economy, through a fully Chinese made public-private sector partnership. I don’t know whether we will get there for some time.

“I also wouldn’t say this interconnectedness doesn’t exist elsewhere in the world, just maybe the projects that have taken place in China have made more progress,” adds Hui Ling.

There is also a big divide in how technology advances in some regions versus others. China’s third richest city Shenzhen, the home of drone maker DJI and EV maker BYD, is arguably the Silicon Valley of the country, according to Hui Ling.

When picturing a futuristic Chinese metropolis brimming with technology, it is the closest city in China to this reality. Drone delivery is becoming the norm, as are autonomous taxis, whilst almost blanket surveillance coverage means petty crime is a rare occurrence.

The city has also built dedicated testing areas and flight corridors to facilitate urban drone operations and eVTOL trials. Its proximity to Hong Kong, Guangzhou and other economic hubs makes it a prime location for companies developing low-altitude economy technologies.

Similar plans have been put into action in Guangzhou, Chengdu and Hefei – home to XPeng, as well as policies adopted in some form by every administrative region in China. However, similar to the US, not all regions are equal for a number of factors such as geography, workforce and concentration of companies.

Beijing, for example, has also designated test flight corridors for air taxi and drone flight testing, though deployment is at an earlier stage compared to Shenzhen. The same is true for electric vehicle adoption, surveillance and drone delivery.

The age of ‘eVTOL diplomacy’

Shifting their focus internationally, since 2020, Chinese companies – EHang and AutoFlight being the foremost – have begun exporting their eVTOL concepts across southeast Asia, Europe and the Middle East.

Meszaros has coined the term “eVTOL diplomacy” to describe this effort which sees domestic companies mirror traditional aviation policy to create partnerships and agreements with “foreign entities to bolster bilateral and multilateral ties, foster economic cooperation and tackle common challenges like certification, safety standards, infrastructure development, technology exchange and trade,” she says.

EHang has conducted test flights of its aircraft across Asia, Europe, North America and South America, racking up around 50,000 flight hours. “They would never be able to do that without some kind of diplomatic effort,” comments Meszaros.

Amongst other efforts, the company has built a command-and-control centre in Abu Dhabi, United Arab Emirates (UAE) and established a strategic partnership with Lleida-Alguaire International Airport to conduct test flights at its urban air mobility centre in Catalonia, Spain in conjunction with the European Union Agency for the Space Programme.

AutoFlight has completed test flights in Japan and the UAE. It also delivered its first eVTOL aircraft, aka Prosperity, to an undisclosed customer in Japan in April 2024. XPeng has announced distribution partnerships in Egypt, Jordan and the UAE amongst others, and TCAB, a subsidiary of Chinese auto giant Geely, raised $20m from a Middle Eastern fund last year.

Domestically, another Geely subsidiary Aerofugia agreed a deal to launch a joint venture in 2023 with German eVTOL developer Volocopter in Chengdu. Established as Volocopter Chengdu, the agreement also includes an order for 150 Volocopter aircraft. However, that agreement is in doubt after Wanfeng acquired Volocopter’s assets in a $10.9m deal in early March following the German company’s failure to secure renewed investment after a period of insolvency.

Attempts to export Chinese aircraft have been seen before. Aviation lawyer Hui Ling was among the first to represent companies that formed part of China’s first wave of aircraft leasing firms from 2010 onwards. “They were starting to look at owning aircraft and leasing it to domestic players as well as leasing into foreign jurisdictions. I think that play formed part of their One Belt, One Road playbook, because aviation is just an extension of rail and shipping,” she explains.

Whilst foreign commercial aviation deals have waned since 2015, Hui Ling says there is more willingness to expand business in the low-altitude economy as its forms part of the government’s growth plan.

“They see it as a way that they can really seize a comparative advantage in the global scene because they have manufacturing capabilities, very good battery technology, AI capabilities and autonomous navigation. Best of all they have a regulator that is willing to allow companies to run pilots within what we would normally consider as civilian communities. 

“I think those are very unique factors that are driving the low-altitude economy in China,” she adds.

Nonetheless Hui Ling is not blind to the challenges China will face along its growth trajectory. “Civil aviation expertise in China is limited compared with the rest of the world. Aircraft design and aeronautical engineering is still pretty new to the country. In places like North America and Europe there is a much deeper history with companies such as Airbus and Boeing.”

She believes the need for cross-border collaboration remains key for China to achieve its aims, but a downturn elsewhere in the world could work in its favour. “I think we’re at a very unique time because a lot of the American and European players are starting to see their valuations come down. Also, the VC and stock market isn’t doing great. So I think we might see some shifts in terms of talent and opportunity.” 

Geopolitics and global harmonisation

As we ease, or tumble, into President Trump’s second tenure in The White House geopolitical tensions are very much back in the spotlight (even versus Biden’s time in office). And, of course, tariffs.

With Trump’s return, global harmonisation on air mobility may already be off the table. During his election campaign, he stated: “Just as the US led the automotive revolution in the last century, I want to ensure that America, not China, leads this revolution in air mobility.” That doesn’t mean US investors won’t take a bet, however. Think Warren Buffet investing in BYD back in 2008.

Whilst “leading” might be a subjective term, this can generally be assumed to be the region that integrates these new types of aircraft and the services they offer into its national transport ecosystem safely first – safely being the optimum word. Western commentators regularly express scepticism about Chinese aviation safety standards, and industry stakeholders will largely say this is the biggest obstruction to harmonisation between China and the Western world.

Founder and CEO of Albatross AI Martin Ding acknowledges that China’s aggressive development approach sometimes prioritises deployment over certification, whereas the US and Europe takes a more rigid safety-first approach.

“On both sides – the Western world and the Chinese community – we need to move toward meeting in the middle,” says Ding. “That is why I really want to promote the global harmonisation effort. In fact, last year at the Global AAM Symposium in Montreal, I was invited to be on a panel discussion. But my visa got rejected. That’s the kind of thing that complicates collaboration.

“Right now, China is deploying a lot of resources into low-altitude economy infrastructure. But how do we align with the FAA and EASA? That’s still an open question.”

Ding says the right question to ask is not which pathway trumps the other, but where to draw a clear line. On one side of the line are areas of common ground where the industry can reach consensus without much work to harmonise, he says. “On the other side of the line I would call it ‘agree to disagree areas’, where we see difference due to pragmatic considerations, such as national security concerns or the maturity and completeness of a region’s own supply chain or ecosystem.”

In 2024 China’s aviation regulator published two frameworks aimed at regulating electric and uncrewed aviation. Firstly, CAAC released Guidelines for the Preparation of Special Conditions for Electric Propulsion Systems to speed up the certification process for eVTOLs. It also released Rules for the Safety Management of Civil Unmanned Aerial Vehicle Operations (CCAR – 92), which mainly serves drones at present, but is a good guideline for future eVTOL regulations especially when flying autonomously.

However, unlike the FAA or EASA, China’s regulator has not yet published a framework for the operation of eVTOLs. Operating certificates are currently discussed on a case-by-case basis, according to Asian Sky Group’s Jeffrey Lowe.

“Right now it’s mostly for EHang because they are the only commercialised eVTOL product so far. But there is lots of work being done for the regulation of drones; the government wants a system that can have access to all the drone and eVTOL data, so that all flight activity can be monitored by AI, with weather systems, collision avoidance systems, traffic control, route planning and more, all embedded into one platform (or each local platform),” says Lowe.

Work is progressing. Last week EHang was awarded its first air operator certificates (AOCs) by the CAAC through two of its operating entities: Guangdong EHang General Aviation, EHang’s subsidiary based in Guangdong Province, and Hefei Heyi Aviation, a joint venture between EHang and Hefei’s municipal government. The AOCs are the first globally for an uncrewed passenger-carrying aircraft.

Whilst the certifications do not permit urban air mobility operations, they allow Ehang to conduct urban sightseeing and low-altitude tourism services with its autonomous EH216-S in cities like Guangzhou, Shenzhen and Hefei. EHang’s partners in cities such as Taiyuan, Shanxi Province and Wuxi, Jiangsu Province are also preparing for similar certifications.

The AOCs came nearly 18 months after the CAAC issued a type certificate for two-passenger eVTOL in April, 2024.

Harmonisation is a complex question

The question of global harmonisation is “incredibly complex”, according to Innolink’s Haowei Bai. He splits the issue into two sections: a company’s need to survive financially by exporting its product to other markets and the Chinese government’s efforts to keep domestic technology within the country.

“I frequently speak to Chinese innovators and what I see is that the export of Chinese technology is more of an individual behaviour of a company, solely because right now the eVTOL market in China from a regulation clarity perspective is not as good as, for example, the Middle East,” says Bai.

“They have to survive. Venture investors in China are more aggressive than the US. A typical VC fund probably lasts for about 10 years in US, but in China they only last for five years. They’d like to see financial performance, and they also sometimes build this into the investment agreement with redemption terms.”

That said, Meszaros describes a growing movement in China of viewing venture capital as “patient capital”. “Meaning that returns on investments need to be considered over a longer time horizon,” she explains. Which could point to Chinese venture investors becoming accustomed to the trials and tribulations of deploying capital in aviation.

Bai thinks that companies like EHang were “forced” to export ideas due to the pressure of becoming commercialised imposed by the demands of investors.

On the flip side, he says China’s government has tightened restrictions on the export of domestic UAV technology, under which he includes eVTOLs like those developed by EHang and AutoFlight. “Five years ago, there was a considerable amount of technology exported, but today Chinese export restriction policy has very strict and detailed regulations related to factors like take-off weight and technology use.

“I’d say that the government really doesn’t want those advanced technology to go anywhere else, especially when framed by geopolitical issues.” 

Ding from Albatross AI says when considering piloted eVTOL aircraft, it doesn’t matter if a company is in the US, Europe or China because the technology is “a natural extension from the existing general aviation aircraft platform”.

“Then if you look at things from the operation dimension, for passenger carrying services and the majority of public service operations among major countries and regions we share the same fundamentals to define the performance metrics to measure the operation efficiency. We are also using the same principles to establish the unit economics model. 

“For those areas we are seeing a clear common ground and we can start the global standardisation efforts right away,” adds Ding.

Now for uncrewed or RPAS platforms and a few commercial operations such as drone delivery, the CAAC, EASA and FAA are taking the different pathways to establish regulatory frameworks and using different fundamentals to build the unit economics model, says Ding. “For these areas the right mentality is to keep each other posted and we’ll get back to the table when the timing is right.” 

Supply chain maturity 

Turning back to President Trump’s statement from March 2023, the US and its allies’ clear loss in the battle for drones could be seen as a clear signal for how the race for this latest wave of air mobility will go.

UP Partners’ 2025 Moving World Report surmises it well: Most components of commonly used drones were invented in the US, Japan and Europe but almost all are now made in China.

The maturity of China’s supply chain is likely to be a key differentiator in the ability to scale a domestic electric aviation industry. According to Innolink’s Haowei Bai, in areas such as aerostructures, composite materials, motor batteries and power management, payload subsystems and onboard sensors, China is at an advantage versus the rest of the world.

“Most of these suppliers have the ability to leverage competitive advantage developed from adjacent markets — automotive, alternative energy, commercial air transport i.e. C919 or ARJ21 — to the low-altitude economy. Their quality, speed to react, willingness to cooperate, aftermarket service are quite impressive.

“What’s lagging behind are aerodynamics and safety optimisation at system integration, flight control for large VTOLs and human factors in the cockpit design of piloted VTOLs. In these areas, benefited from decades of commercial aviation experience the rest of the world has a more mature and efficient supplier base and engineering disciplines.”

The demand boom for electric cars in China and globally, as well as the development of the C919, has put the country in good shape with regards to supply chain, says Lowe at Asian Sky Group.

“Consequently, I would say China’s supply chain overall is in a class of its own compared to the rest of the world — no other country has the infrastructure, educated labour force, affordable electricity, know-how and efficiency that China has in manufacturing. All these factors then contribute to China having lower cost, faster production time and high quality. 

“Part of the reason why the Chinese government is promoting the LAE is because China can do everything in-house without needing to worry about geopolitical risks,” adds Lowe.

The investment environment in China 

With a visit to China late last year still relatively fresh in the memory, SMG Consulting’s Cecutta said he was surprised by how optimistic and “ready to deploy” investors are — likening the environment to the US and Europe in the midst of 2021’s SPAC boom.

According to Innolink’s Bai, The People’s Bank of China has taken steps to ease liquidity pressures, including recent cuts to the reserve requirement ratio for banks, removal of local government debt and administrative orders to solving SMEs’ account receivable issues. These moves are aimed at encouraging more lending and healthier trades in domestic market, particularly to small and medium-sized enterprises that have been struggling with access to capital. Additionally, he says the central bank has signalled potential further reductions in interest rates, though analysts remain divided on whether these measures will be enough to counteract broader economic headwinds.

“We’ve seen a concerted effort from policymakers to inject liquidity into the financial system, but the challenge remains whether businesses and consumers will respond with increased spending and investment,” explains Bai. “There’s still a degree of hesitation, given the uncertain economic outlook.”

Furthermore, in response to recent stock market volatility, regulators have introduced new measures aimed at curbing speculative trading and improving the quality of assets in open market. The China Securities Regulatory Commission (CSRC) outlined stricter requirements for margin financing and pledged to crack down on market manipulation. CSRC also imposed upgraded requirements for initial public offering (IPO) applications, aiming at promoting assets with sustainable and healthy return on equity. These efforts are intended to restore confidence among investors, though there are concerns that frequent regulatory shifts create uncertainty.

“We’re seeing some investors hesitate due to unpredictability in policy direction. While increased oversight is meant to stabilise markets, sudden regulatory changes—especially in sectors like technology and finance—can have the opposite effect, making foreign and institutional investors wary.”

Notwithstanding the above, Bai has recently increased his exposure to China’s technology sector, particularly AI, LAE and advanced material companies. Despite regulatory challenges, he, like Lowe at Asian Sky Group, sees strong government backing and a clear long-term strategy to make China self-sufficient in these technologies.

“For instance, I’ve invested in a few mid-sized firms that are developing advanced material and commercial aviation. These companies are benefiting from state capital and strategic partnerships, positioning them well for growth. While global tensions and export restrictions pose risks, I believe the domestic market demand and Beijing’s push for technological independence will sustain long-term profitability.

“Another key reason I remain optimistic is consumer technology. E-commerce, cloud computing and fintech continue to evolve rapidly, and with the scale of China market Chinese firms are innovating at a pace that rivals or even surpasses their western counterparts. As regulatory pressures ease, I expect valuations to rebound,” says Bai.

Bai’s confidence is informed by a China that has a history of continuing to rapidly develop technology through periods of economic slowdown. A recession could well be on the way for China in the process of ongoing economic restructuring, unemployment has risen in recent months to nearly the highest rate since the pandemic (5.4%), whilst the price level fell for a second consecutive year in 2024. Not to mention the US’ implementation of a 104% tariff on Chinese imports.

In early April 2025, EHang said it does not expect recent tit-for-tat tariff developments between China and the US to impact its operations. The firm’s stated that it does not export its vehicles or related products to the US market, nor does it rely on US-origin components in its manufacturing processes. Last year, EHang generated 95% of its revenues from the Chinese market.

LAE industry supply chain and market are self-sufficient in China, says Bai. “The tariff war will likely accelerate its development due to the fact that an oil price spike would steer the development of electric or hybrid aircraft to a high-speed lane, not only as an alternative to traditional aircrafts but also to fossil fuel-powered ground transportation vehicles.”

Bai also thinks the ongoing depreciation of currency will weaken the purchasing power of consumers. This will likely lead China’s central government to further stimulate the domestic market, including increasing its liquidity. “If this became true in the near future, the speed of capital investment movement would accelerate, which in turn directly benefits innovation and technology development in China.”

Despite a host of challenges, government policy, long-term investment and a strong domestic supply chain will keep the low-altitude economy sector growing. If the EV industry is anything to go by, companies that were once a laughing matter to competitors in the West can become global leaders. China wants the world to take its low-altitude economy seriously and it is becoming hard to ignore.

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