Hangzhou, a leading technology hub in China and the capital of Zhejiang province, is considering ending its dedicated financial support package for the low-altitude economy, potentially becoming the first city in the country to do so. The proposal follows a review process and is currently undergoing public consultation, which is scheduled to conclude on October 7.
The initiative began two years ago with policies designed to promote various facets of the low-altitude economy, including enterprise establishment, technological innovation, the development of new flight routes, and infrastructure projects. These measures provided substantial fiscal incentives, with top awards reaching 200 million yuan (approximately HK$234 million) for anchor enterprises and up to 10 million yuan for newly registered companies. Originally, the policy was set to remain active until the end of 2024.
The Hangzhou Municipal Bureau of Finance cited an internal assessment and consultations with related government bodies as the basis for the proposed repeal but offered no further explanation. The proposal comes in the wake of heightened industry attention following a fatal small aircraft crash into Beijing’s tallest building in June, which raised safety concerns regarding the sector.
Industry experts suggest the move may signal a broader effort to optimize regulatory frameworks rather than an outright withdrawal of support. Tan Chaochen, chairman of the Shenzhen Bao’an Low-Altitude Economy Industry Association, indicated that the repeal aligns with national efforts to regulate local industrial policies and promote fair competition across markets. Tan noted that selective subsidies by local governments, including Hangzhou’s generous cash rewards, could distort competition and may be incompatible with recent central government policies emphasizing fairness and the creation of a unified national market.
An official from Shanghai’s government, speaking anonymously due to the sensitive nature of the issue, echoed this perspective, stating that Hangzhou’s incentive structure had generated concerns about unfair competitive advantages and had been flagged with regulators.
Tan further clarified that the proposed repeal does not imply a reduction in support for the sector in Hangzhou. Instead, the focus is shifting from attracting companies through financial incentives toward fostering sustainable operational growth and enabling firms to develop viable businesses within the low-altitude economy.
Despite the policy adjustments, Hangzhou remains committed to advancing its low-altitude sector. The city aims to cultivate over 600 firms involved in the industry and achieve a total sector output exceeding 60 billion yuan by 2027. As of the end of 2025, Hangzhou had reportedly reached more than 70 percent of these targets.