China's Drone Industry Takes Flight: A New Driver of Economic Growth

China's southern technology hub, Shenzhen, is at the forefront of the country's efforts to cultivate a low-altitude economy through drone technology. For years, the government has provided strong support for drone production, and it is now seeking to apply these technologies in other sectors of the economy. With a thriving drone network, Shenzhen is becoming a "sky city," and the industry is poised to become a major driver of growth. Chinese companies are dominating the production of commercial drones, accounting for 70-80 percent of global supply, and the country is also leading in research and development, with 79 percent of approved drone patents globally last year.

Key Takeaways:

• China's drone industry is driven by government support, with tax relief, subsidies, and industrial parks provided to companies in the sector.
• Shenzhen is the hub of China's drone industry, with companies like DJI and Harwar developing drones for various applications, including schools, firefighting, and inspecting roads.
• The low-altitude economy in China is expected to grow fivefold to Rmb3.5tn ($490bn) by 2035, according to the Civil Aviation Administration of China.
• Chinese companies are partnering with delivery platforms like Meituan, JD.com, and Ele.me to use drones for takeaway deliveries.
• The military remains a significant customer for drone manufacturers, but companies are also seeking to enter the civilian market.
• Research and development in China is leading the world, with 79 percent of approved drone patents globally last year, and 64 patents filed by DJI alone.

Statistics:

• China accounts for 70-80 percent of global commercial drone supply.
• The country has a stranglehold on research and development, accounting for 79 percent of approved drone patents globally last year.
• DJI alone filed 64 patents among the total of 7,890 patents in 2022.
• The civilian drone market is expected to grow significantly, with the state planner establishing the Low-Altitude Economy Development Division to develop the industry.
• Nearly 2.2mn drones were registered with the CAAC at the end of last year.
• About a third of China's industrial drones are used in agriculture or forestry, while over a fifth are used for geographical surveys.

Sources:

• "Chinese companies dominate the commercial drone market" - Drone Industry Insights
• "China's military getting increasingly reliant on drones" - Mathys & Squire
• "Government support drives drone industry growth" - multiple company and analyst sources
• "Shenzhen drone hub developing at high speed" - report by London-based law firm Mathys & Squire
• "China's low-altitude economy to grow fivefold by 2035" - Civil Aviation Administration of China
• "Drones help reduce pesticide spraying time" - JIS operations chief Wu Yudong
• "Meituan receives approval for drone delivery" - Meituan announcement
• "DJI patents soar in 2022" - Mathys & Squire report