- Low-altitude economy represents a paradigm shift in transportation, reducing infrastructure costs by utilizing airspace efficiently.
- Gao Chunhai (郜春海) outlines a two-phase evolution: initial industry empowerment followed by logistics sector explosion.
- Key cost advantages over traditional aviation include lower pilot and fuel expenses, driving scalability.
- Regulatory support and technological advancements are accelerating market adoption across China.
- Investors should monitor developments in eVTOL (electric vertical take-off and landing) aircraft and related infrastructure.
The buzz around China’s low-altitude economy is reaching a fever pitch, and for good reason. As global investors seek the next growth frontier, this emerging sector promises to redefine urban mobility and logistics with its compelling cost proposition. At the recent Phoenix Bay Area Finance Forum 2025, industry leader Gao Chunhai (郜春海) pinpointed the core driver behind this surge, emphasizing that the low-altitude economy’s appeal hinges on unprecedented efficiency gains. This isn’t just about flying cars; it’s about creating a new economic layer that could rival traditional transport networks in scale and impact. For professionals tracking Chinese equities, understanding this shift is crucial to capitalizing on early-stage opportunities.
The Rise of Low-Altitude Economy in China
China’s low-altitude economy is gaining traction as a strategic priority, backed by significant government and private investment. Unlike conventional aviation, which operates at higher altitudes, low-altitude activities typically occur below 1,000 meters, encompassing domains like drone deliveries, urban air mobility, and aerial inspections. This sector is poised to address chronic challenges in logistics and transportation, particularly in densely populated areas where ground infrastructure is congested. The low-altitude economy leverages advancements in AI and electric propulsion to create scalable solutions that were previously impractical due to cost constraints.
Market Size and Growth Projections
Recent data indicates that China’s low-altitude economy could surpass RMB 500 billion by 2030, driven by exponential adoption in logistics and passenger transport. For instance, the Civil Aviation Administration of China (CAAC) has earmarked over 100 low-altitude flight zones for testing, signaling strong regulatory backing. Companies like EHang Holdings have already demonstrated viable eVTOL prototypes, with trial operations launched in cities such as Guangzhou and Shenzhen. This rapid progress underscores the sector’s potential to become a cornerstone of China’s broader economic strategy, aligning with goals like reducing carbon emissions and enhancing supply chain resilience.
Gao Chunhai’s Vision: A Two-Step Evolution
Gao Chunhai (郜春海), Vice President of the China Listed Companies Association and Chairman of Jiaokong Technology, provides a structured framework for understanding the low-altitude economy’s trajectory. Drawing parallels to the early automotive industry, he emphasizes that maturation will follow a logical progression. The first phase focuses on augmenting existing industries, such as using drones for infrastructure inspection or retail deliveries. This incremental approach allows for technology refinement and regulatory磨合 (breaking in). The second phase, which Gao anticipates will be transformative, targets logistics, where eVTOLs can transport goods weighing up to 500 kilograms at a fraction of the cost of ground alternatives.
Empowering Traditional Sectors
In the initial stage, low-altitude applications are already demonstrating value in sectors like agriculture and energy. For example, drones equipped with sensors monitor crop health or inspect power lines, reducing labor costs and improving safety. Gao highlights that these use cases build credibility and generate early revenue streams, essential for attracting further investment. As technology reliability improves, scalability becomes feasible, setting the stage for broader adoption. This phased approach ensures that the low-altitude economy grows sustainably, minimizing risks associated with premature expansion.
Cost Advantages Over Traditional Aviation
The fundamental appeal of the low-altitude economy lies in its cost efficiency, a point stressed by Gao Chunhai (郜春海). Traditional helicopters face prohibitive expenses related to pilots and aviation fuel, which limit their widespread use. In contrast, electric vertical take-off and landing aircraft operate with autonomous systems and cheaper energy sources, slashing operational costs by up to 70%. This cost differential is transformative, enabling applications that were previously economically unviable. By treating airspace as an untapped production factor, the low-altitude economy bypasses the land-intensive requirements of roads or rails, offering direct point-to-point connectivity.
Infrastructure and Scalability
Building aerial routes involves minimal physical infrastructure compared to subways or highways, which often require years of construction and massive capital outlays. For instance, deploying a network of vertiports for eVTOLs can be integrated into existing urban structures like rooftops or parking lots, reducing upfront investment. Gao notes that this flexibility accelerates deployment, particularly in emerging markets where ground infrastructure is underdeveloped. As battery technology advances, range and payload capacities will improve, further enhancing the low-altitude economy’s value proposition. Investors should monitor companies leading in vertiport development, such as those partnering with local governments under China’s Smart City initiatives.
Regulatory Landscape and Government Support
China’s regulatory environment is increasingly conducive to low-altitude economy growth, with policies designed to foster innovation while ensuring safety. The State Council has included low-altitude economy development in its latest Five-Year Plan, outlining targets for airspace liberalization and standardization. Key bodies like the Civil Aviation Administration of China are streamlining certification processes for eVTOLs, with guidelines expected by 2026. This top-down support mitigates regulatory uncertainty, a critical factor for institutional investors. However, challenges remain, including air traffic management and public acceptance, which require coordinated efforts between policymakers and industry stakeholders.
Policy Initiatives and Incentives
Local governments are offering subsidies and tax incentives to companies pioneering low-altitude technologies. For example, Guangdong Province has allocated RMB 1 billion to support research and development in urban air mobility. These initiatives align with national strategies like Made in China 2025, which prioritizes high-tech industries. Investors can track progress through official portals like the Chinese Government Website, which publishes updates on policy adjustments. As regulations evolve, compliance will become a key differentiator for companies operating in this space, highlighting the importance of engaging with regulatory developments.
Investment Opportunities and Market Implications
The low-altitude economy presents diverse investment avenues, from aircraft manufacturing to software and services. Publicly listed companies like AVIC Helicopter are expanding into eVTOL production, while startups focus on AI-driven navigation systems. Gao Chunhai (郜春海) advises investors to prioritize firms with robust R&D capabilities and strategic partnerships, as technology integration will be critical. The logistics segment, in particular, offers high growth potential, with projections suggesting it could capture 30% of intra-city cargo transport by 2035. For equity markets, this trend could spur new IPOs and M&A activity, similar to the electric vehicle boom of the past decade.
Risks and Mitigation Strategies
Despite the optimism, risks include technological hurdles, such as battery life and safety certifications. Investors should diversify across the value chain to mitigate sector-specific volatility. Additionally, monitoring international benchmarks, like progress in the U.S. or European low-altitude markets, provides context for evaluating Chinese companies. As the low-altitude economy matures, those who enter early could reap significant rewards, but due diligence is essential to navigate this nascent landscape.
Future Outlook and Global Perspective
China’s low-altitude economy is not an isolated phenomenon; it reflects a global shift toward sustainable and efficient transport. Comparisons with initiatives like NASA’s Urban Air Mobility project reveal shared challenges and opportunities. However, China’s scale and centralized planning could give it a first-mover advantage in commercialization. Gao Chunhai (郜春海) predicts that within a decade, low-altitude transport will become as commonplace as ride-hailing services today. This evolution will rely on continuous innovation and cross-border collaboration, positioning the low-altitude economy as a key theme for long-term investors.
The low-altitude economy is more than a niche market; it’s a transformative force with the potential to reshape economic geography. By prioritizing cost efficiency and scalability, China is laying the groundwork for a new era of mobility. Investors should engage with industry reports and attend forums like the Phoenix Bay Area Finance Forum to stay ahead of trends. As Gao Chunhai (郜春海) aptly summarized, the core of this revolution is accessibility—making air travel affordable and ubiquitous. The time to act is now, by exploring equities in leading low-altitude economy players and monitoring regulatory milestones that could signal the next growth wave.