On June 6, President Trump signed two executive orders designed to build back up the U.S. civilian drone industry: one orders various agencies to promote American drone exports, and the other limits government purchases of drones linked to the Chinese government. Whether these measures are too little, too late to turn around a global market that has been dominated by China for over a decade remains to be seen. But what it does miss is that China’s drone industry is not merely a story of civilian systems, but of military ones as well—and a strategic plan that yokes multiple parts of government and industry to a central goal.
The PLA’s interest in drones is extensive, as is often observed around Taiwan. Drones participated in joint exercises around the island in August 2022, April 2023, May 2024, October 2024, and April 2025. UAVs are a regular presence in PLA incursions around Taiwan’s periphery, indicating that they would likely factor heavily in any Taiwan Strait conflict. And high- and low-end UAVs reportedly figure in its simulations of Strait scenarios.
Nevertheless, the PLA is apparently still determining what kind of UAVs it needs—perhaps long-endurance drones operating alone on strike or ISR missions, autonomous drone swarms of different types (including “mothership warfare”), or manned-unmanned teams like larger drones as “loyal wingmen” for piloted fighter jets.
To this end, China is closely monitoring the role of drones in contemporary military conflict, especially in the Russia-Ukraine War. In particular, the PLA is drawing extensive lessons from its partnership with Russia, including concerning the use of swarms of expendable, ultra-low-cost drones that China could use its enormous industrial capacity to manufacture in large quantities.
Like so much else, the Chinese Communist Party’s push for more robotic systems reflects its leaders’ vision for development. In his 2022 report to the 20th Party Congress, Xi Jinping called for accelerating the development of “unmanned intelligent combat forces.” Core PLA strategic texts recognize unmanned systems as integral to contemporary warfighting, and all PLA services and theater commands now use UAVs for a wide array of missions. These include intelligence, surveillance, and reconnaissance; maritime and border defense patrol; ground and naval strike; air-to-air combat; anti-submarine warfare; air defense suppression (including by using small UAV swarms); electronic warfare; communications support and data relay; transportation and logistical support; emergency medical support; firefighting; and information operations. There is also a growing trend towards more autonomous UAV systems. Two PLA Academy of Military Sciences experts recently observed that improvements in autonomous combat capabilities are shifting the usual ratio of humans to unmanned equipment from “many controlling one” (multiple people operating one unmanned platform) to “one controlling one” (one person controlling one UAV) to “one controlling many” (one person controlling many platforms).
The drone troika
A recent report highlights how these goals have been paired with the modernization and expansion of China’s military drone industry. China’s defense industrial base has used the military-civil fusion, or MCF, national development strategy to benefit from China’s dominance of the commercial drone industry. Drones, an inherently dual-use technology, have been a major MCF success story, due in part to their scalability, customizability, and generally lower start-up and production costs. While most Chinese defense-export sectors have been stagnant, drone exports have boomed. From 2018 to mid-2024, China accounted for more than one-quarter of global military drone sales. According to the Chinese Institute of Command-and-Control, a professional organization with extensive links to the PLA, “UAVs are the most representative products of military-civil fusion.”
This success story reflects three categories of actors working together: state-owned enterprises; universities, especially those with a defense focus; and private or mixed-ownership companies.
Like other sectors of China’s defense industry, UAV production is dominated by major defense- and aerospace-focused state-owned enterprises. Among these are:
● Aviation Industry Corporation of China. Ranked last year as the world’s second-largest defense firm, AVIC manufactures the medium-altitude, long-endurance Wing-Loong UAV series used by the PLA and exported to the UAE, Saudi Arabia, and Pakistan.
● China Aerospace Science and Technology Corporation. CASC makes the Caihong (“Rainbow”) series of drones used by the PLA and exported to Algeria, the Democratic Republic of Congo, Indonesia, Iraq, Laos, Myanmar, and Pakistan.
● China North Industries Corporation, a.k.a. NORINCO. Ttraditionally focused more on land-based weaponry such as tanks and artillery, NORINCO appears to be a growing player in the UAV field, including through its 2023 acquisition of Xi’an Aisheng Group, long a major producer of drones for the PLA.
● Other major players include China Aerospace Science and Industry Corporation, or CASIC, and China Electronics Technology Group Corporation.
Defense-focused universities have also been key players in the development of China’s UAV sector. Ever since Beihang University carried out China’s first successful drone test in 1959, research on military drones in China has been spearheaded by universities—particularly members of the defense-focused consortium known as the “Seven Sons of National Defense,” including Beihang, Nanjing University of Aeronautics and Astronautics, and Northwestern Polytechnical University.
All these universities receive extensive funding from major defense state-owned enterprises, with whom they cooperate on UAV research, testing, and development. For example, Beihang has a strategic cooperation agreement with CASC and numerous cooperative relationships with AVIC subsidiaries. In 2023, the university also signed an investment and R&D cooperation agreement with NORINCO, which gained a majority stake in a Beihang subsidiary that manufactures the PLA’s BZK-005 UAV.
The final key set of actors in the troika advancing China’s military UAV industry are private or mixed-ownership companies. Most of the firms in this category manufacture drone components or parts. However, some of the more sophisticated and well-connected companies, such as Sichuan Tengden Technology, are increasingly prominent players, and have even begun to produce whole UAV platforms. Sichuan Tengden was founded by Nie Haitao, a former senior official at AVIC and an expert for the Central Military Commission’s Science and Technology Commission, showing the close relationship between these ostensibly private companies and China’s military-industrial complex. The TB-001 attack drone developed by Tengden has been spotted near Japanese airspace on several occasions, indicating it is likely in service with the People’s Liberation Army Eastern Theater Command, the main force tasked with Taiwan operations.
As the Russia-Ukraine war has demonstrated, drones have gone from auxiliary players to game-changers in contemporary warfare. Should China ever move on Taiwan, the PRC would likely deploy UAVs on a scale unseen in human history. This would be made possible by China’s large civilian drone industry built up through military-civil fusion. And should the conflict drag on, China’s enormous manufacturing capacity would be a huge advantage. The recent executive orders signed at the White House may be a step toward mitigating that advantage—but they are just one step in a long race to catch up.
John S. Van Oudenaren is a Research Analyst at BluePath Labs focused on Chinese foreign and defense issues.
P.W. Singer is Strategist at New America and the author of multiple books on technology and security, including Wired for War, Ghost Fleet, Burn-In, and LikeWar: The Weaponization of Social Media.
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