context: after issuing restrictions in May 2017, the central government released the first document supporting UAVs, putting them on par with NEVs in the nation's innovation agenda. This also means they will be equally prone to subsidy-abuse and overcapacity. Applications in agriculture will see the most growth, followed by security. Inclusion of technical standards for drones will help support purchase subsidies for the products, particularly in farming.
Ministry of Industry and IT issued ‘Guiding opinions on promoting and regulating the civilian UAV industry’, aiming to
- by 2020: generate C¥60 bn total output with over 40 percent annual growth rate
- by 2025: generate C¥180 bn total output with over 25 percent annual growth rate
Previously, iResearch estimated the domestic market would reach C¥75 bn by 2025, including
- C¥30 bn in aerial photography and entertainment
- C¥20 bn in agriculture and forestry
- C¥15 bn in security
- C¥5 bn in inspecting electricity cables and other infrastructure
The drone industry has grown from C¥450 million in 2012 to C¥9 bn in 2015, reports China Economic Times, noting that is one of the few high-tech products in which China leads globally. But firms have focused on production and sales, foregoing R&D investments, says the report, noting the Guiding opinions move to address this by calling for military-to-civil tech transfers. The policy further sets 200 technical standards for civilian drones, filling a key regulatory gap, says China Economic Times.
Market leader DJI is courting the agricultural market, reports Jiemian, with R&D efforts, attention to affordability, and a 1,000 person strong post-sales team that will help the firm become service rather than hardware-centred. 11,000 agricultural drones are active in China according to November 2017 Ministry of Agriculture data, of which DJI sold 7,500 (70 percent), says the report (Note: competitors). Jiemian notes room for growth as drones are only used on two percent of domestic farmland area, against 50 percent in the US and 38 percent in Japan. National subsidies were announced in September 2017. The market is far from saturated, especially for professional-grade drones, agrees Zhao Ziming 赵子明 Analysis International analyst.