China rolled out strict drone controls in May, forcing owners to register, transmit flight data and obtain pre‑approval for restricted zones. The crackdown triggered a flood of second‑hand sales; Leyishou vice‑president Liu Zhenyu said many dumped machines, pushing prices down about 30%. The measures hit the $26 bn domestic market dominated by DJI, which holds 70‑80% of global civilian drone share and threaten export growth.

At the Shenzhen drone expo, more than 1,200 firms displayed everything from hobby models to van‑sized industrial craft, yet several warned that the new rules could stall growth. Dong Honglong of Shantou Shengze said his factory slashed prices by over half yet still lost money on each unit. Suppliers fear a shift away from the consumer segment toward regulated commercial applications.

Beijing’s tightened airspace forced firms like Visbot to relocate registration to Yanqing, while hobbyists such as DarwinFPV’s Chen Yuquan migrated south for looser rules. Analysts note the state aims to build a “low‑altitude economy” worth Rmb3.5tn by 2035, but the current clamp‑down squeezes margins and may push manufacturers to focus on logistics, agriculture and emergency‑response drones.