China’s “Low-Altitude Economy” Takes Flight – A Unique National Strategy with Global Investment Implications

Q: China’s “Low-Altitude Economy” Takes Flight – A Unique National Strategy with Global Investment Implications

You're watching the global race for flying cars and drones, but what you might be missing is how China has turned this entire sector into a state-mandated economic engine with its own rulebook. While others navigate fragmented regulations, a coordinated push from ten key ministries is not just opening airspace—it's building an entire standardized ecosystem from the ground up. For investors, this creates a unique three-layered play, from aircraft makers to infrastructure enablers. But the real question isn't who's building the vehicles; it's which companies control the invisible grid that will make them fly profitably at scale.

Title: China’s “Low-Altitude Economy” Takes Flight – A Unique National Strategy with Global Investment Implications
Author: Arvin
Date: February 4, 2026

While the world talks about “urban air mobility” (UAM) or “advanced air mobility” (AAM), China has coined its own term—and built its own ecosystem: the “Low-Altitude Economy” (低空经济). Though conceptually similar to Western UAM frameworks, China’s approach is distinct in scale, state coordination, and integration into national industrial policy. It’s not just a market—it’s a strategically mandated growth pillar, now backed by a formal national standard system.

For overseas investors in A- and H-shares, this represents a rare opportunity: early exposure to a state-driven, trillion-yuan infrastructure and logistics revolution unfolding below 1,000 meters.

What Is the “Low-Altitude Economy”? (And Why Is It “Chinese”?)

The low-altitude economy refers to economic activities conducted in airspace below 3,000 meters—primarily 300–1,000 meters—using eVTOLs (electric vertical take-off and landing aircraft), drones, and other unmanned or piloted aerial vehicles for logistics, passenger transport, emergency response, agriculture, and surveillance.

While eVTOL development is global (Joby, Archer, Lilium), China’s model is unique because:

It treats low-altitude airspace as a national economic resource, not just a regulatory domain.
It integrates aviation, telecom, AI, battery tech, and smart city infrastructure under one policy umbrella.
The government is simultaneously building standards, opening airspace, upgrading infrastructure, and subsidizing adoption—a level of top-down coordination unseen elsewhere.

As of February 2, 2026, this strategy entered a new phase with the release of the 《Low-Altitude Economy Standard System Construction Guide (2025 Edition)》, jointly issued by ten ministries, including Civil Aviation, Transport, Industry & IT, and the Central Air Traffic Control Office.

Key targets:

By 2027: Basic standard system established; safety and scalability ensured.
By 2030: Over 300 national standards in place, forming an “optimized, advanced, and internationally compatible” framework.

This isn’t just regulation—it’s a market-making signal.

Who Benefits? Three Layers of Opportunity

✈️ 1. Aircraft & Core Component Makers

These companies are building the “hardware” of the sky:

【万丰奥威–Wanfeng Auto Holding–002085.SZ–General Aviation / eVTOL】
Acquired core assets of German eVTOL pioneer Volocopter in March 2025. Now integrates Volocopter’s distributed electric propulsion and VoloIQ cloud platform with its own aviation manufacturing base to offer a full portfolio: fixed-wing + eVTOL + drones.
【金盾股份–Jindun Fans–300411.SZ–HVAC / Intelligent Propulsion】
Launched Zhejiang Hanyi Intelligent Propulsion in July 2025 to develop ducted fan systems for eVTOLs. By December 2025, its prototype had completed vertical takeoff, hover, and integrated flight tests with a client’s airframe—marking rapid progress from R&D to validation.

📦 2. Low-Altitude Logistics & Operations

This is where real-world revenue begins:

【顺丰控股–SF Holding–002352.SZ–Logistics】
The undisputed leader in commercial deployment:
- Launched China’s first “air-ground integrated” smart logistics hub in Shenzhen (Feb 2025).
- Ordered 100 ES1000 large unmanned cargo aircraft from Yifei Aviation (Mar 2025).
- Built 10 vertiports in Hong Kong and launched intercity routes: Shenzhen ↔ Dongguan, Zhongshan, Zhuhai.
- Offers consumer-facing “Cross-City Air Delivery” service in the Greater Bay Area.
SF Holding is effectively building China’s first low-altitude logistics network—a potential moat akin to Amazon Prime Air, but with government backing.

⚙️ 3. Enablers: Infrastructure, Certification & Software

Though less visible, these players provide critical support:

Air traffic management systems
Battery-swapping stations for drones/eVTOLs
Geospatial data and UTM (Unmanned Traffic Management) platforms
Composite materials and lightweight structures

(Note: Many enablers are private or subsidiaries; public pure-plays remain limited but emerging.)

Policy Tailwinds Accelerating Adoption

Beyond standards, two major legal shifts are imminent:

New Civil Aviation Law takes effect in July 2026, formally recognizing low-altitude operations and clarifying liability, certification, and airspace rights.
《Low-Altitude Economy and Core Industry Statistical Classification (Trial)》 enables official GDP tracking—making it a measurable KPI for local governments.

According to Bai Wenxi, Chairman of Zhonghe Kunlun Asset Management, the next 1–2 years will focus on three pillars:

Airworthiness certification, airspace liberalization, and commercial scenario scaling.

This suggests regulatory clarity is coming fast—reducing the “policy risk” that has historically plagued frontier tech in China.

Is This a “China-Only” Play?

In practice—yes, for now. No other country combines:

Centralized airspace control (enabling rapid testing zones)
Local government incentives (e.g., Guangdong offering RMB 100M subsidies per vertiport)
Integrated supply chains (batteries, motors, avionics all made domestically)
Massive domestic demand (logistics, medical delivery, tourism)

Western eVTOL firms face fragmented regulations, NIMBYism, and high certification costs. In China, cities compete to host pilot programs.

That said, successful Chinese models—especially in autonomous cargo logistics—could eventually export technology and operational templates globally.

Investment Takeaway for Global Investors

The low-altitude economy is not yet a broad market, but it offers high-conviction, early-mover opportunities in select A-share names:

✅ Core holding: 【顺丰控股–002352.SZ】 – already monetizing services, with network effects.
✅ High-risk/high-reward: 【万丰奥威–002085.SZ】 – global tech + Chinese scale, but execution risk remains.
✅ Emerging component play: 【金盾股份–300411.SZ】 – if its propulsion system wins design-ins, upside could be significant.

Monitor upcoming developments:

First type certifications for eVTOLs (expected late 2026)
Expansion of low-altitude corridors beyond Guangdong
Potential IPOs of drone logistics or UTM startups

Disclaimer: The low-altitude economy is an emerging theme with high technological, regulatory, and commercial uncertainty. This blog is for informational purposes only and does not constitute investment advice. Always conduct independent due diligence.

—
Arvin
Global Thematic Investor | Focused on China’s Next-Generation Infrastructure
Helping international investors decode China’s unique innovation ecosystems—from semiconductors to skyways.