Over the next decade the value of the unmanned aerial vehicles (UAVs) market is set to rise and the expansion of the global drone market will be driven by increased costs rather than larger production. According to Forecast International, about 1,000 UAVs of all types in will be produced in 2014, with output rising to nearly 1,100 units in each of the following two years. Production is then forecast to average about 960 UAVs annually for the remaining seven years between 2014-2023. Throughout this period, the value of production will rise, from about $942m in 2014 to $2.3bn in 2023. Where does China sit in this picture?
China’s state-owned Aviation Industry Corporation of China (AVIC) is predicted to account for the majority ($5.76bn) of the 10-year global market value, based on production of hundreds of expensive UAVs, nearly all earmarked for Chinese consumption.
According to Avionics Intelligence, AVIC manufacturers already produce “a wide range of UAVs, including its electrically powered micro-air vehicle (MAV), the jet-powered LIEOE, (which appears almost identical to the Northrop Grumman RQ-4 Global Hawk), for reconnaissance, surveillance, and attack missions, the AVIC Sky Eye, an electrically unmanned helicopter designed to be deployed by artillery or rocket round, for reconnaissance and targeting, and the TL-8 Sky Dragon for simulating cruise missiles for Chinese military.”
No-one knows for sure the size of China’s drone fleet, but a Taiwan Defence Ministry report claimed that as of mid-2011 the Chinese Air Force had 280 vehicles, whilst other branches of the Peoples Liberation Army had thousands more, making China second only to the US – which has around 7,000 UAVs – in terms of the size of its overall fleet.
Both the government and the military are trying to catch up with American drone industry, with every major Chinese arms company now having a research centre devoted to drones. China is already exporting drones close in appearance to the Predator, but selling for less than a million dollars each. Other drones that have appeared at air shows also appear to be based on foreign designs.There are also photographs showing what appears to be a stealth drone, the Lijian (Stealth Sword), undergoing tests.
Although China is gearing up its production of drones, it still lags far behind the West in their development and deployment. Larry Dickerson, senior unmanned vehicles analyst at Forecast International, says the People’s Liberation Army (PLA) wants to catch up and is accelerating production and deployment of UAV systems. This is similar to the US situation as it entered Iraq and Afghanistan.
“The demand for UAVs has surged and to meet the demand production increased and the size of the US inventory rapidly increased. South Korea and Japan are also increasing their spending on UAVs and will help to fuel this market,’ Dickerson told China Outlook.
So just how is China increasing its fleet of UAVs? “Russia is the example being followed,” says Dickerson. “China has been steadily increasing its spending on unmanned vehicles and related technology. Beijing is trying to acquire technology from foreign sources, with a major source being Russia, but European companies are also involved. China is expected to continue along with this path in the future,” he stated.
China’s fleet of drones has become the most extensive fleet among the few countries that operate them. This is turn has raised questions about stability in areas such as the disputed Diaoyu/Senkaku islands and the South China Sea. Recently, US ally Japan has become unhappy about Chinese drone flights over the disputed Senkaku Island group, (called Diaoyu in China), claiming they will shoot down any drone that refuses to leave Japanese airspace. However Dickerson believes these UAVs will not affect these disputes in a major way.
“China is using UAVs from some warships, but deployment is still limited. I do not think China has land-based systems that can reach these islands,” Dickerson says.
While China has focused on UAVs with air-to-surface weapons and precision-guidance munitions, Japan’s focus is on industrial use of helicopters, with civilian and commercial applications like crop dusting.
China is currently working on a wide array of UAV systems and already has man-portable and tactical systems in service. A medium-altitude, long-endurance UAV (MALE), similar to the US-made Predator and Reaper, is in development. In the future, China plans to field systems similar to the Global Hawk, as well as an unmanned combat air vehicles (UCAV). The Chinese UCAVs appear to be similar to Northrop Grumman’s X-47 which is due to enter service in 2019.
Recently China has also indicated how it might deploy its growing drone fleet. For example, last year state media outlets reported that Beijing had considered conducting a drone strike in the Golden Triangle area to find and kill a Myanmar drug lord who was wanted in China.
Forecast International also stated in its report that after AVIC, US-based Northrop Grumman would be the largest UAV producer over the next decade. According to the forecast, the company — which produces the RQ-4B Global Hawk and the US Navy’s MQ-4C Triton — will manufacture $2.58bn worth of UAVs through 2023.
As China grows to rival the US and its military power, what does this mean for the relationship between the two superpowers?
“Beijing is mimicking the actions of the United States and its European allies. China was deeply impressed by the performance of UAVs in Iraq and Afghanistan. China wants this capability, but it will take years for the PLA to develop the necessary doctrine,” says Dickerson.
It will be interesting to see over the next decade if there is enough room for both superpowers to compete in the same UAV market and accept each other’s presence. Perhaps China’s insistence over the disputed island may play into Japan’s hands in terms of an alliance with the US? Furthermore, with Russia’s advanced drone capabilities, they may well be intent on ensuring their own fleet can more than match the powers of neighbouring nations.
Not only are drones being used for military operations, China is also looking to use drones for civil use. According to The China Daily: “UAVs are increasingly used in a variety of fields, including electric power industries, disaster-relief work, as well as shooting TV programmes,” Li Yong, vice president of Wuhan Ewatt Aerospace Technology Co Ltd, which specializes in making drones, said at the fifth UAV China Conference & Exhibition in Beijing.
There now appears to healthy competition amongst big e-commerce companies to improve efficiency and speed in getting products to consumers. Amazon is testing drones to deliver goods, while in China, the SF Express delivery company is experimenting with drones in the southern city of Dongguan, according to a report by the Civil Aviation Resource Net of China.
SF Express is yet to fully implemented its large-scale plans for delivering packages to the most difficult areas of China, though a resident of the southern Chinese town of Dongguan reported seeing one of the company’s drones make a delivery there and took a number photos, which he uploaded to his Sina Weibo social media site, according to China’s Southern Metropolitan Daily.
China considers “UAV express” legal, which is the opposite the US, where the commercial usage of drones have been held up by the Federal Aviation Administration until new regulations are issued in 2015. Businesses in the US get authorization from local civil aviation authorities who must approve the type of drone being used.
Whether for military or e-commerce operations, the number of UAVs or drones rolled out over the next decade will continue to grow. Forecast International states that some 41,800 land- and sea-based unmanned systems worth about $10.5bn are forecast for production from 2014-2023.
China will need to improve its technology to match the capabilities of American and Russian drones, without causing conflict with the superpowers, or neighbouring Japan. Linked with the drone market for civilian use, great opportunities beckon for the foreseeable future in a competitive and expanding market.