China's Revised Civil Aviation Law Takes Effect 1 July 2026 as Shenzhen, Zhuhai and Sichuan Offer Low-Altitude Economy Subsidies

The revised Civil Aviation Law of the People's Republic of China took effect on 1 July 2026, strengthening the legal framework for the low-altitude economy. Local governments have also introduced subsidies, land support and financing measures to attract businesses, and the incentives vary in scope, eligibility and implementation.

Shenzhen offers airworthiness certification rewards of RMB15 million per passenger-carrying electric vertical take-off and landing (eVTOL) aircraft model, RMB5 million per large drone model and RMB3 million per medium-sized drone model. Each model qualifies only once, with an annual cap of RMB30 million per enterprise. Separate subsidies cover low-altitude logistics routes and short-haul passenger routes, including domestic routes and cross-border routes between Shenzhen and Hong Kong. Zhuhai provides a one-off subsidy covering 50% of fixed-asset investment in take-off and landing facilities.

On land and industrial space, Shenzhen gives coordinated municipal support to qualifying major projects, including priority consideration of space needs, alongside district-level rental subsidies. In Dapeng New District, eligible businesses and institutions in the designated low-altitude economy industrial park may receive up to 50% of actual rent, capped at RMB20 per square metre per month and RMB3 million annually per business or institution. Zhuhai has created a dedicated S5 land-use category for low-altitude take-off and landing facilities, supporting flexible land supply.

On funds and credit, Guangzhou has set up an RMB20 billion aerospace industrial investment fund covering the low-altitude economy and the wider aerospace supply chain, investing from early-stage to mature businesses. Shenzhen plans an RMB2 billion municipal low-altitude economy industrial fund, alongside district-level and other industry funds. One example is TCab Tech's RMB700 million syndicated loan for manufacturing plant construction, airworthiness certification and continued research and development.

The article advises that where subsidies depend on prior approvals, airworthiness certification, airspace approvals and operating permits should be built into early project planning and obtained before applying.

It also recommends treating subsidies as reimbursement rather than as funding for construction spending, so construction costs can be budgeted from own funds or credit financing. For large establishment subsidies carrying three- to five-year tax, output or employment commitments, it recommends seeking staged payments and exemption clauses in contract negotiations.

The pattern across these cities is a shift from a single national rulebook to competing local packages. The revised law supplies the legal footing, while the money, land and credit come from municipal and district governments, each with its own eligibility tests. For a manufacturer or operator, the cost of setting up in a city therefore depends as much on which approvals it holds and when as on the headline figure.

The structure of the rewards also matters. Per-model certification awards that pay once per model and cap at RMB30 million per enterprise in Shenzhen favour companies that can reach airworthiness certification quickly, while Zhuhai's 50% fixed-asset subsidy and its S5 land category point at infrastructure builders. Funds such as Guangzhou's RMB20 billion vehicle and Shenzhen's planned RMB2 billion fund add equity to what is otherwise reimbursement-style support.

What decides the practical value of these packages is the commitment terms: the three- to five-year tax, output or employment obligations tied to large establishment subsidies, and whether payment is staged. Those clauses, rather than the announced amounts, determine how much of a package a business actually keeps.