Report

China unmanned aerial vehicle market is projected to witness a CAGR of 10.96% during the forecast period 2024-2031, rising from USD 13.12 billion in 2023 to USD 30.15 billion in 2031. According to the Civil Aviation Administration of China (CAAC), in 2023, there were around 1.27 million UAVs registered nationwide, a 32.2% increase from the previous year. Roughly 19,000 businesses were using drones for operations, and 194,000 individuals had drone pilot certifications. These unmanned aerial vehicles have proven indispensable in a variety of industries, including entertainment, forestry, animal husbandry and fishery, agriculture, etc.
China is a world leader in UAV manufacturing, with the capacity to produce any type of UAV. This production capability drives the industry's rapid expansion and enables a wide range of applications across various sectors. China has established 17 civil unmanned aviation test zones and three test bases, covering cities, islands, and other application areas, in response to the exponential growth. These measures further solidify China's dominance in the global drone market, supporting advancements in drone technology and applications.
China's military drone market is flourishing due to notable developments in attack and surveillance unmanned aerial vehicles (UAVs). Recognizing the strategic importance of drone warfare, the government is investing in military modernization. China leads in UAV invention and deployment, symbolizing economic progress and strategic advancements in technology and security that are reshaping the UAV industry globally.
Government Regulatory Framework to Boost Market Growth
Due to substantial government investments, legislative and regulatory support, China's UAV sector is expanding quickly. Over 200 regulations have been established and updated by the Chinese Ministry of Industry and Information Technology for civilian drone application, production, research, and safety. Shenzhen serves as the center of China's growing domination in the UAV industry. Renowned as the Silicon Valley of China, Shenzhen is a home to more than 600 licensed drone manufacturers, which makes it a prime location for the innovation and worldwide competitiveness of the sector. This growth is facilitated by advancements in technology and government support.
China's Ministry of Industry and Information Technology is establishing a regulatory framework to expedite the execution of policies pertaining to unmanned aerial vehicles (UAVs). The framework consists of administrative guidelines and normative papers for UVA operations, including commercial certification and pilot criteria. The Ministry is constantly improving the regulatory environment to keep up with the UAV market's rapid development.
Increasing Usages of AI and Machine Learning in UAV for Defense Industry
Chinese drones are becoming more advanced, with an AI-powered drone claiming to defeat a human-operated UAV in an aerial battle. The drone outmaneuvered the human by attempting to force it to crash into the ground. Chinese military authorities are testing swam drone capabilities, where multiple units are used to attack or monitor targets via a single networked system. China has developed secretive hardware to prevent drones manufactured in the country from being used to attack China.
For instance, China's Caihong 4 (CH-4), created by the China Academy of Aerospace Aerodynamics, is a well-liked device that resembles the MQ-9 Reaper manufactured in the United States. It can be employed for both attack and reconnaissance. Whereas the human operator can manage the Wing Loong 2, an unmanned aerial vehicle with sensors and infrared cameras for supply line monitoring and strike attacks.
Defense Segment to Dominate the Market Share
The defense segment is projected to exhibit significant growth in China UAV market during the forecast period. This growth is attributed to increasing defense expenditure by the Chinese government. With a focus on intelligence, surveillance and reconnaissance (ISR), China's People's Liberation Army is progressively integrating advanced domestically manufactured unmanned aerial vehicles (UAVs) into its armed forces. Notably, these include models such as the GJ-1, GJ-2, WZ-7, and WZ-8. According to the Stockholm International Peace Research Institute (SIPRI), in 2022, China was ranked as the top defense spender in Asia-Pacific and the second largest in the world, with a defense budget of USD 293 billion.
In January 2024, Chinese companies displayed a number of UAVs at the Eurosatory exhibition in Paris, which has enhanced stealth, sensors, and attack capabilities. China has established itself as a major arms exporter, mainly to the Middle East, North Africa, and South Asia, based on creating affordable military unmanned aerial vehicles. Despite competition from other arms exporters and limited presence in Europe, China is expected to continue expanding its UAV business.
Fixed Wing UAVs are Dominating the Market

The fixed-wing UAV market in China is experiencing significant growth, fueled by domestic demand, favorable policies, and strong manufacturing capabilities. Compared to multirotor UAVs, large-size fixed-wing drones have a larger market share as they can fly farther, last longer, and cover more ground. China is witnessing a significant increase in the use of fixed-wing unmanned aerial vehicles (UAVs), which are known for their superior power efficiency and capacity to carry larger cargo.
For instance, China's drone industry has seen a significant increase in newly registered unmanned aerial vehicles in the first half of 2024, reaching nearly 608,000, a 48% increase from the end of 2023. The industry is focusing on improving communication, navigation, and surveillance capabilities, and establishing safety rules and regulatory policies for various flight activities.
Future Market Scenario (2024 - 2031F)
The intricate and varied UAV regulations in China have fueled the expansion of the transportation, logistics, agricultural, and environmental protection sectors. This is a result of laws and policies that support technological innovation. The nation's governmental structure is continually evolving to keep pace with the rapid development of UAV applications. The Ministry of Information and Technology (MIIT) has created or revised over 200 regulations concerning the study, development, use, and safety of civil UAVs. In addition to high-quality communication via 5G and big data technologies, a robust administrative structure is essential to ensure the future-proof use of UAVs in transportation and logistics.
Policymakers in China emphasize their approval of unmanned aerial vehicles in low-altitude airspace. To shape the future of the drone market, they focus on developing digital infrastructure, standardization, regulation, technological advancements, and user acceptability. Cooperative discussions at both political and technical levels can yield fruitful outcomes, facilitating the rapid expansion of the UAV industry in China.
Chinese drone manufacturers are integrating unmanned aerial systems into mobility and transportation through pilot and demonstration projects. These initiatives demonstrate how UAVs could eventually replace combustion engine-powered vehicles in both urban and rural settings. Unmanned aerial vehicles can deliver goods quickly and affordably, regardless of road conditions. They are used for logistical tasks in rural areas and for first and last-mile urban short-distance express deliveries. However, substantial investments in hardware and technology advancements, such as longer battery life or research into new propulsion systems, will be necessary to achieve economically and technologically viable and sustainable UAV deployment.
Key Players Landscape and Outlook
China unmanned aerial vehicle market is dominated by several key players, including SZ DJI Technology Co., Ltd. (DJI), EHang Holdings Ltd. ADR, and Yuneec International Co., Ltd., which lead in innovation and market share. Due to the growing need for UAVs in industries such as agriculture, surveillance, logistics, and urban air mobility, the market is expected to increase significantly. UAV technology is advancing due to government support and large R&D investments, which are expanding the devices' capabilities and uses.
For instance, in 2023, to develop innovative air mobility solutions and applications, China's EHang has partnered with Xi'an Aerospace Investment Science and Technology Development Holdings Group. The two companies will prioritize the development of smart flight operating systems and the promotion of autonomous aerial vehicles, which will improve air mobility in a variety of scenarios.
Similarly, in 2023, XAG Co Ltd, the leading manufacturer of agricultural drones in China, presented its smart agricultural products and application scenarios. The gadgets are meant to help with unmanned agricultural output. They have made significant advancements in autonomous driving, structural design, material research, and intelligent manufacturing.