China: China's Drones Regulation: Where Is It Headed?

Last Updated: 7 January 2016
Article by Xiaoyan Zhang and Bertha Cheung

On 15 August 2015 and 1 July 2015, China released two announcements1 ("Announcements") regarding export restrictions of Unmanned Aerial Vehicles ("UAVs"), commonly known as drones, before they can be approved for export overseas. Both Announcements took effect on the date they were released. The First Announcement requires operators of certain UAVs2 to make an export application with the Commercial Administrative Department of the State Council ("Department") by submitting certain required documents3. The Second Announcement governs export controls for three types of UAVs4 for dual military-and commercial use.

The Announcements are released with the primary aim of protecting cutting-edge military technology in the interest of national security and concern both military and commercial UAVs. Whereas military UAVs are intended for tactical reconnaissance, carriage of offensive weapons, and projection of surveillance information; commercial UAVs are well-known for their inexpensive and light-weight flying devices whose uses range from aerial photography and site inspection to aerial mapping.

China's move to implement the Announcements is in line with the robust export control regimes endorsed by many countries across the world, notably, the Missile Technology Control Regime ("MTCR") and the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies ("WA").

Missile Technology Control Regime ("MTCR")

The MTCR is a voluntary association of 34 participating countries across the world with the aim of combining national export licensing efforts to prevent proliferation of unmanned delivery systems. It was originally established in 1987 by Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.

The MTCR has set out the "MTCR Guidelines" and the "Equipment, Software and Technology Annex" as guidelines for the implementation of export control legislations within each state. There are two categories of items that are recommended to be subject to export controls, namely, "Category I" and "Category II". UAVs can fall within both categories depending on their technical features. While UAVs in "Category II" are still subject to export restraints, partners shall have greater flexibility in the treatment of "Category II" export applications.

Wassenaar Arrangement

The Wassenaar Arrangement ("WA") is a well-known international export control regime comprised of 41 participating states and is the successor to the Cold War-era Coordinating Committee for Multilateral Export Controls (COCOM) established in 1996 in Wassenaar, the Netherlands.

UAVs and related components specifically designed or modified for military use shall fall within the "Munitions List", whereas those designed to have controlled flight out of the direct natural vision of the operator and consist of certain technical specifications shall fall within the "List of Dual-Use Goods and Technologies" under Category 9 (Aerospace and Propulsion). Another important guideline to note under the WA is the "Introduction to End-User/End-Use Controls for Exports of Military-List Equipment", which regulates end user/end use controls in the case of exports of military UAVs in order to ensure that exported items will not be diverted to unintended end users or end uses.

Rethinking China's Position

China is neither a member of the MTCR nor the WA. However, China did apply to be a member of the MTCR back in 2004, but its application was ultimately rejected. The rejection stemmed from the concern that China continued to support other developing countries, such as North Korea, in their development of missile technologies.

Despite not being a member of the MTCR and the WA, China has closely mirrored a number of key export control guidelines set out in the MTCR and the WA in the Announcements. For instance, the technical specifications for UAVs set out in the First Announcement are equivalent to those set out in the "List of Dual-Use Goods and Technologies" of the WA. Similarly, the technical specifications for UAVs set out in the Second Announcement are similar to those set out in "Category II" under the MTCR. Notably, the requirement for end-user and end-use assurance under the Announcements is also seen as an important safeguard against unintended use of military UAVs in light of the WA.

The close references to the guidelines under the MTCR and the WA are by no means a coincidence. Given the rising power of China, be it in the political arena or in the drones technology field, the move is clearly seen as a strategic step to cohere with international efforts to procure non-proliferation of unmanned delivery systems commonly endorsed by many countries across the world. While it is hard to predict if China will make use of the Announcements as a breakthrough to the previous rejection by the contracting states of the MTCR, the Announcements will certainly shed positive light on China in view of its tension with a number of Asian neighbors on the issue of military drones development.

Within China, however, the Announcements are still receiving positive feedback as a whole. While the top priority continues to be protecting the national drones manufacturing technology from leaking into unwanted hands, the Announcements ensure that the economic effects brought by commercial UAVs are not diminished with the implementation of the export controls. For one thing, China has seen an exponential increase in its commercial UAVs exports in recent years. According to Shenzhen Customs District5, in the first five months of this year, UAVs manufacturers in the city alone exported 160,000 models valued at RMB 750 million (US$120.7 million), a 55-fold increase year-on-year. Of the total, the giant UAV manufacturer in China, Da-Jiang Innovations Science and Technology Company Limited, accounted for more than 95% of sales.

Across the industry, the Announcements have not impacted most commercial UAV manufacturers as their products are often limited to a maximum flight time of about 20 minutes, which will make them naturally fall out of the restrictions set out in the Announcements. Even where the export control restrictions may apply to a number of commercial UAVs manufactures, it appears that the Announcements have not imposed a chilling effect as domestic manufacturers are constantly faced with export control restrictions imposed by other countries, and in most cases, adopt a more robust export control regime than China.

Conclusion

The release of the Announcements is a welcome move. While the move sees China coming closer to other contracting states to attain the common goal of non-proliferation of UAVs, it also serves as a mechanism to better protect sensitive military drones technology within the Chinese territory in the interest of national security and at the same time continues to enable its commercial UAVs industry to thrive with few export restrictions. The extent of enforcement of the export control policies in China are yet to be seen, but meantime the Announcements are certainly a positive step forward.

Footnotes

1  The two Announcements are: Announcement regarding the Strengthening of Export Controls over Several Dual-Use Items (No. 31 of 2015) released by the Ministry of Commerce and the General Administration of Customs (商务部海关总署公告2015年第31号 关于加强部分两用物项出口管制的公告) and Announcement regarding Export Controls over Unmanned Aerial Vehicles for Dual Military-and-Civil Use (No. 20 of 2015) released by the Ministry of Commerce, the General Administration of Customs, the State Administration of Science and Chinese PLA General Armament Department (中华人民共和国商务部中华人民共和国海关总署国家 国防科技工业局中国人民解放军总装备部公告2015年第20号关于对军民两用无人驾驶航空飞行器实施临时出口管制措施的公告).

2 UAVs that are capable of controlled flight outside the natural line of sight of the operator and contain any of the following features shall be subject to export controls: a maximum navigation range equal to or greater than 30 minutes but less than 1 hour and with a maximum wind speed equal to or greater than 46.3 kilometres/hour (25 knots) under the condition of gusty wind; or a maximum navigation range equal to or greater than 1 hour. On the other hand, related equipments or components of UAVs, which enable a UAV to fly at heights of above 15,420 meters (50,000 feet), shall also be subject to export controls under the First Announcement.

3  This includes: identification proof of the legal representative(s), chief manager(s) and the manager(s) of the Applicant; a copy of the contract or agreement; technical notes of relevant items; end-user and end-use assurance; and other documents required by the Department.

4  The three types of UAVs are : (1) a shooting/navigation range equal to or greater than 300 kilometres; (2) capable of an autonomous flight control and navigation capability and include any of the following features: incorporating an aerosol dispensing system or device with a capacity greater than 20 litres; or designed or modified to incorporate an aerosol dispensing system or device with a capacity greater than 20 litres; and (3) capable of controlled flight outside the natural line of sight of the operator and include any one of the following features: incorporating an aerosol dispensing system or device with a capacity greater than 20 litres; or designed or modified to incorporate an aerosol dispensing system or device with a capacity greater than 20 litres.

5  See news report entitled "Shenzhen Unmanned Aerial Vehicles Increase Exponentially by Taking Up 99.9% of the Country's Total Exports" (深无人机呈几何级增长占全国出口总量99.9%): http://www.customs.gov.cn/publish/portal109/tab61265/info764080.htm).

Originally published 18 December 2015

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