World Economy

China Firms See Boom in Drone Sales

China Firms See Boom in Drone SalesChina Firms See Boom in Drone Sales

A blip on a radar screen caused consternation at Beijing’s international airport last December. Soon 1,226 armed personnel, 123 military vehicles, 26 radar technicians, two fighter jets and two helicopters were scrambled in response. But the scare turned out to have been triggered by a mapping drone, the China Daily admitted last month, with three men later detained for unauthorized survey work.

As drones become more affordable, the aviation authorities in the United States are wrestling with their own issues about how best to regulate them. Operation of unmanned aerial vehicles goes on in a relative grey area, where the Federal Aviation Administration  has allowed private individuals to fly them for “recreational or hobby purposes, and within the visual line of sight of the operator” but prohibits businesses from using them commercially, at least until a rewriting of the rules next year, HSBC reported.

There is some room for maneuver, including trials for movie firms to use them for filming. Amazon also wants to use drones for deliveries (it says it has models that can travel at 50 miles per hour carrying 2.3kg of payload, which would account for almost 90% of its packages).

In China the government is already using drones too, deploying them to detect illegal emissions from factories and track terrorist suspects in the far west of the country. In March, the authorities also tested larger drones that spray chemicals to disperse smog, for example.

 Advantage Over US

Usage by the private sector is less developed, although drone proponents say the e-commerce boom in China makes aerial delivery look promising. Logistic giant SF Express trialed delivery drops with eight-rotor helicopters in Guangdong last year. There is optimism too that restrictions on drone exports by American manufacturers may have given Chinese firms a sales advantage. One example is the Phantom series from DJI, a Shenzhen start-up that began selling mini-helicopter-like drones last year. It now controls half of the $300 million global market for smaller models, according to market research firm Frost & Sullivan.

Weighing less than three pounds and selling for about $1,400, the latest Phantom lets its controllers watch video footage streamed live to their smartphones.

In more traditional parts of the aerospace world, the Chinese have struggled to close the gap on their rivals and the latest attempt at making a wide-bodied jet capable of challenging Airbus and Boeing–the C919–is well behind schedule. But with UAV technology, Chinese firms could be poised for “leapfrog development”, the National Business Daily hopes.

“The gap between these companies and their western counterparts is not that big,” says Zhang Feng, secretary-general of the Aircraft Owners and Pilots Association, of the manufacturers. “China’s drone industry is quite competitive, especially in areas such as avionics and flight control.”

The industry’s backers make positive noises about the regulatory context as well, noting that there is no blanket ban on commercial drone activity similar to the FAA’s in the United States.