As we delve into the trends reshaping our economy, the concept of "low-altitude economy" emerges as one of the most significant players in 2024. Since the beginning of this year, various entities—local governments, enterprises, and investors—have been racing to establish a foothold in this new arena, indicative of a burgeoning market landscapeWithin a short span of twelve months, over twenty provinces across China have unveiled actionable plans to develop low-altitude economic activities, leading to the establishment of more than 7,000 new registered companies, with industrial fund sizes reaching a staggering RMB 100 billionThis enthusiasm has spilled over into the stock market, where at least 38 companies listed on the A-share market related to low-altitude economy witnessed stock price increases of over 30%, with some skyrocketing to double their initial value.

Skies, much like land and oceans, represent significant resources waiting to be tapped

The potential for development in the lower atmosphere aligns with broader global trends that prioritize innovative resource utilizationInterestingly, several applications of low-altitude economics have existed for years, including the use of drones for pesticide spraying and helicopters for transportationHowever, the explosive growth of the low-altitude economy captured widespread attention in 2023. What changed this year?

At the forefront of this surge are more robust and targeted policy measuresIn 2023, the Central Economic Work Conference categorically positioned low-altitude economy as a strategic emerging industryFast forward to 2024’s National People's Congress, low-altitude economy was again highlighted as a "new engine for growth." The clarity provided by these high-level meetings has galvanized market players, leading them to identify lucrative business opportunities.

The low-altitude economy is characterized by an extensive industrial chain and significant synergy across sectors

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With advanced manufacturing at one end and new consumption models, smart cities, cultural tourism, among others, at the other, this sector thrives on capital, technology, and skilled laborOpportunities abound—from aircraft manufacturing and operational services to developing support infrastructureThe market demands at every facet of production and service delivery present enormous potential for growth, translating to the creation of millions of job opportunities.

New growth trajectories often emerge from novel business formatsAs traditional industries like real estate enter a period of stability, the urgency to cultivate new economic growth points has intensifiedThe recent initiatives—whether in promoting first-mover economic strategies, winter sports, senior consumer markets, or low-altitude activities—aim to stimulate investment and consumption by enhancing both the supply and demand sides of the economy

The overarching intent is to unearth pathways for growth through technological innovation and new product development.

Nevertheless, policy initiatives reflect broader trends driven by existing industrial capacities, particularly in sectors such as electric vehicles (EVs) and aerospaceData suggests that a substantial 70% to 80% of the components used in air taxis—technically known as Electric Vertical Takeoff and Landing (eVTOL) vehicles—overlap with those utilized in the EV sectorThe ongoing advancements in EV technology—such as high-energy-density batteries, reliable electric motors, sophisticated control systems, autonomous navigation technologies, and even comprehensive charging networks—provide a solid foundation for developing the low-altitude economyAdditionally, China’s homegrown C919 large passenger aircraft has set a precedent by contributing engineering and safety expertise to eVTOL development.

While China's general aviation infrastructure, including aircraft and airports, currently lags behind developed nations like the United States, this gap presents unique opportunities to leapfrog existing limitations, accelerating the race to dominate the "city in the sky."

The low-altitude economy is still in its infancy, and its promising prospects come with caveats inherent within the industry’s structure

Initial development phases for aircraft design, materials, manufacturing, and certification demand significant financial investmentsEven upon entering commercial operations, substantial funding—often in excess of hundreds of millions of yuan—is requiredRecent reports indicate that over half of the listed companies within the low-altitude economy did not achieve profit increases, with core business operations often showing lossesThis paradox of a vibrant industry juxtaposed with challenging revenue generation is likely to persist.

In contrast to the electric vehicle landscape, launching eVTOL vehicles involves navigating a complex regulatory regimeKey requirements include acquiring a type certification (TC), production license (PC), and airworthiness certificate (AC) from the Civil Aviation Administration of China, all vital for mass commercializationFurthermore, the necessary infrastructure for flight—such as airspace allocation and route planning—must be incrementally developed, starting from dedicated low-altitude economic zones and expanding to wider regions while prioritizing safety

The availability of takeoff and landing points is still sparse, and the existing mapping, positioning, navigation, and communication systems are not fully optimizedAs the adage goes, "To get rich, you must first build roads." This holds true in the air as well.

The amalgamation of these factors suggests that the path to establishing a robust low-altitude economy will be a lengthy endeavorAll participants must cultivate patience and endurance through this journeyThe industry calls for patient enterprises that can maintain a long-term vision focused on technological innovation, product development, and the expansion of use cases, thereby accelerating widespread adoption of low-altitude servicesThere is also a need for capitol that recognizes and believes in the long-term value of this sector rather than chasing after short-term speculative gainsEqually important is the government’s role in planning strategically while adhering to market principles, ultimately guiding the industry towards safe and orderly progress.

This year, many individuals have had their first visceral encounter with the wonders of low-altitude economy: what once took two hours by car to travel from Shenzhen to Zhuhai can now be reduced to a mere twenty-minute aerial journey