A research institute affiliated with China Aerospace Science and Industry Corp is developing the project "Feiyun," which means "flying cloud," the Global Times reported, citing another report in the Science and Technology Daily.
The network will be based in "near space", it said, adding the system will be able to provide week-long emergency communications access and likely to go on trial this year.
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Experts believe the technology can play an important role in aiding rescuers in the aftermath of natural disasters.
However, they warned that the severe environment in "near space" — 20-100 km above sea level — poses a challenge to the UAVs as the thin air inhibits the functioning of fuel- powered aircraft engines.
The high-flying drones are easy to maintain and control, and can better provide high-resolution data than satellites.
They can also be used as "airborne Wi-Fi hubs" to provide convenient mobile telecommunications and Internet access for remote areas and islands, which would save on construction and maintenance costs of traditional infrastructure.
Wang Peiji, an expert at Harbin Institute of Technology's School of Aeronautics, said the UAVs have military uses too.
"Its remote sensing technology can help the military get accurate information with higher definition."
China's first solar-powered UAV, the Caihong (rainbow), completed its first successful near-space test flight in June.
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