Hangzhou weighs ending low-altitude economy incentives

The city of Hangzhou has proposed repealing a local policy providing financial support for the low-altitude economy, potentially ending a program originally set to expire at the end of 2027, the South China Morning Post reported on Monday. The change would come after a small plane crashed into Beijing’s tallest skyscraper in June, prompting Beijing last week to establish a 600-square-kilometer no-fly zone for small aircraft over the Chinese capital.

Hangzhou, a tech hub that is home to e-commerce and cloud computing giant Alibaba, first rolled out its policy to support the local low-altitude economy in 2024. The policy offered various types of financial incentives for things like enterprise establishment and infrastructure buildouts for companies developing low altitude-related products and services like tourist flights, aerial surveys and deliveries using drones and other aircraft.

But in a recent posting on its website, the Hangzhou Municipal Bureau of Finance said that “following internal review and consultations with relevant government departments,” it determined that “the document has grounds for repeal,” according to the South China Morning post report. A monthlong consultation period on the proposal will end on Oct. 7.

Low-altitude economy proponents said Hangzhou’s repeal of financial incentives may be part of a broader national push to unify standards and eliminate unfair advantages in individual markets, and shouldn’t necessarily be viewed as a setback.

Shares of EHang (EH.US), a maker of electric vertical take-off and landing (eVTOL) aircraft that is often seen as a barometer of sentiment towards the low altitude economy, have lost about a third of their value since the initial light aircraft crash in June.

By Doug Young

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