While much of the world is still debating whether the emerging sector should be called Advanced Air Mobility (AAM) or Urban Air Mobility (UAM), China has gone in a different direction. It coined a broader concept — the low-altitude economy — and immediately embedded it into national policy. Unlike the American and European definitions, China’s framework extends far beyond passenger air taxis. It includes consumer and industrial drones, unmanned cargo aviation, agricultural drones, energy and infrastructure inspection, emergency response, tourism, passenger eVTOL aircraft, manufacturing, communications and navigation systems, as well as low-altitude airspace management.
The numbers already reflect that strategy. According to the Civil Aviation Administration of China (CAAC), the country’s low-altitude economy reached its 2025 target of 1.5 trillion yuan, equivalent to roughly $211-215 billion. By 2035, Beijing aims to more than double that figure to 3.5 trillion yuan, or approximately $490-511 billion. Flight activity tells an equally compelling story. Commercial flight hours logged by civilian drones and eVTOL aircraft climbed to 45.3 million hours in 2025, up 69.9% from the previous year. That growth reflects far more than headline-grabbing demonstrations. It shows logistics, infrastructure inspection and agriculture increasingly moving into low-altitude airspace.
China’s model works from both directions at once. The government builds the regulatory and infrastructure framework from the top down, while private companies develop commercial use cases from the bottom up — delivery services, tourism, industrial monitoring and eventually passenger operations. That is not accidental. It reflects the economics of aviation itself. Private companies can develop the technology, but a market only emerges once governments establish the public regulatory and infrastructure framework. Airspace remains a sovereign public resource. Governments decide who is allowed to fly, where aircraft may operate, which certification standards apply, who is responsible for safety, how routes are approved, how operational data is reported to regulators, where vertiports can be built, and how the new ecosystem integrates with airports and military aviation. Within that framework, a dedicated regulatory regime is not a bureaucratic exercise but an economic tool. It reduces uncertainty for investors, enables technologies to be tested within defined zones, creates a clear decision-making authority, accelerates infrastructure approvals, generates real operational data and allows legislation to evolve before the market reaches scale. China has implemented precisely this model nationwide, helping explain why it already has measurable results rather than simply ambitious plans.
Nor is the industry being built from scratch. China already leads the world in civilian drone manufacturing, controls the largest battery supply chain, has strong capabilities in electric motors and electronics, operates advanced telecommunications infrastructure and recently demonstrated how rapidly it can scale an electric vehicle industry. In effect, most of the industrial building blocks were already in place before the regulatory framework arrived.
The low-altitude economy also represents China’s response to slowing growth in more traditional sectors. In 2024, it appeared in the government’s annual work report for the first time as one of the country’s new growth engines. The strategy closely mirrors the electric vehicle playbook: first build a large domestic market, then standardize technologies, and eventually export aircraft, equipment and infrastructure solutions to the rest of the world.
That strategy is already reshaping global capital markets. Late 2024 and 2025 became milestone years for the world’s three leading aviation regulators — China’s CAAC, the U.S. Federal Aviation Administration (FAA) and the European Union Aviation Safety Agency (EASA) — as each moved toward issuing the industry’s first formal airworthiness approvals. China’s issuance of the first Production Certificate (PC)removed one of the sector’s biggest legal uncertainties. Investors could now see that aircraft were no longer just prototypes but products legally cleared for commercial production and deployment. Capital quickly consolidated around established technology leaders with certified pre-production aircraft and commercial contracts. Those companies were overwhelmingly based in China and the United States. In other words, China is not simply building a domestic market worth 1.5 trillion yuan. By moving regulation to the certification stage ahead of most competitors, it has also positioned itself as one of the world’s two primary destinations for venture capital flowing into the sector.
Even Chinese researchers caution against expecting an immediate boom in passenger air taxis. By their own assessments, passenger operations will scale far more slowly than cargo and industrial applications because safety requirements, infrastructure needs and flight economics remain far more demanding. The first truly mass-market product of China’s low-altitude economy is therefore unlikely to be urban air taxis. It will almost certainly be logistics and industrial drone services. That is where the industry’s 45 million commercial flight hours are already being accumulated, even though passenger eVTOLs continue to dominate public attention.
Sultan Valikhanov, expert of the EconomyKZ.org portal
