China syndromeU.S. Government to Stop Buying Chinese-Made Drones

By John Xie

Published 17 February 2021

In its latest move to address national security threats posed by Chinese-made drones, the U.S. federal government’s purchasing agency no longer will purchase drones from Chinese manufacturers. China currently dominates the drone-manufacturing market. One Chinese company, DJI, which is the world’s largest drone maker, has a 76.8 percent share of the U.S. market.

In its latest move to address national security threats posed by Chinese-made drones, the U.S. federal government’s purchasing agency no longer will purchase drones from Chinese manufacturers. 

Citing the inherent threat in using Chinese-made drones, the General Services Administration (GSA) said in a January 12 blog post that it will remove all drones from multiple award schedule contracts, except those drones approved by a Department of Defense (DoD) Defense Innovation Unit program for its small unmanned aircraft systems (sUAS).  

China currently dominates the drone-manufacturing market. The world’s largest drone maker, the Shenzhen-based SZ Dà-Jiāng Innovations Science and Technology Co., Ltd., or DJI, has a 76.8 percent share of the U.S. market, according to the German drone research organization Droneii

The world’s second-largest drone company also is Chinese, according to Droneii. Yuneec International, based in Suzhou, China, produces more than 1 million drones annually, with operations around the world, including the U.S., according to its website. 

Although the U.S. government knew Chinese drones had serious security risks as early as 2017, it has had few options given DJI’s marketplace dominance. A VOA investigation in 2019 revealed the U.S. Air Force and Navy had spent hundreds of thousands of dollars on DJI drones. Public federal procurement records show that well into 2020, the National Oceanic and Atmospheric Administration and the U.S. Department of Veterans Affairs had purchased DJI drones.  

To develop alternatives to Chinese-made small drones, the U.S. Defense Department established a program in 2018 to support non-Chinese companies identified as trustworthy drone makers by the Defense Innovation Unit (DIU), a DoD entity that accelerates commercial technology for national defense. Referred to as Blue sUAS, there are four American manufacturers — Skydio, Altavian, Teal Drones, and Vantage Robotics — and one French company, Parrot, on the approved list.  

Prior to former President Donald Trump’s executive order issued two days before he left office on January 20, and the Commerce Department decision to add DJI to its Entity List on December 22, Congress took steps to limit DJI’s ability to operate in the U.S.  

Trump signed the National Defense Authorization Act (NDAA) for Fiscal 2020 on December 20, 2019, and the American Security Drone Act was reintroduced on January 27. The proposed law would prohibit the government purchase of drones manufactured in countries identified as national security threats, like China. The act has bipartisan support. 

Brendan Groves, head of regulatory and policy affairs of Skydio, told VOA the Redwood City, California, business has exploded in recent years. 

We’ve had to massively expand our manufacturing base within the United States to meet customer demands not only in the United States, but increasingly around the world,” said Groves, a former U.S. Justice Department official.  

Barry Alexander, CEO and founder of Aquiline Drones of Hartford, Connecticut, a U.S. drone manufacturer, told VOA that he is very optimistic about the prospects for domestic drone companies. 

The U.S. has an interest in building a healthier manufacturing ecosystem. There are some indications that local companies will get a lot of support they need from the government” and be able to capture more market share,” said Alexander, whose enterprise is not on the list of approved drone manufacturers. 

But replacing Chinese-made drones poses problems for the near term. David Benowitz, head of research at DroneAnalyst in Redwood City, California, pointed out that “just from a pure manufacturing standpoint, the U.S. manufacturers aren’t there yet to replace DJI.”  

DJI Threats
The U.S. has long been concerned about DJI drones. In 2017, a leaked memo by the Department of Homeland Security accused DJI of spying for China. On May 23, 2018, then-Deputy Secretary of Defense Patrick Shanahan issued a ban on the purchase and use of all commercial off-the-shelf drones, citing “cybersecurity vulnerabilities.” 

Adam Lisberg, DJI’s North American communications director, did not answer VOA’s questions earlier this year about the federal government’s ban. He pointed out in an email that DJI had previously issued a statement on security risks. The October 26, 2020, statement said all of DJI’s drone products can be operated without an internet connection at all, and their government edition solution also disables the ability to send any data to DJI

Growing Demand
The latest data from the Federal Aviation Administration shows that nearly 900,000 drones of various types are registered with the agency. “A few decades ago, drones were confined to science fiction or notions of the future. Today, unmanned Aircraft Systems, or drones, are rapidly becoming a part of our everyday lives,” a FAA statement said recently.

report by the research firm Markets and Markets stated that as of 2018, North America was the world’s largest market for drones, a position it expected the region to retain through 2024.  

John Xie is Senior News Editor at VOA. This article is published courtesy of the Voice of America (VOA).