It's said that military and government agencies have been able to keep an eye on people using the 'Dove' project, which has the potential to be used on a larger scale "in the future".
According to the South China Morning Post newspaper, the project - run by Song Bifeng - uses bird-like drones, which mimic the flapping wings of a real bird and comes fitted with a high-definition camera, flight control system, GPS antenna and data link with the capability for satellite communication.
According to the report, Yang Wenquing - a member of Song's team - revealed the "scale is still small" for now, but there are more ambitious plans for the development.
He said in a comment that researchers "believe the technology has good potential for large-scale use in the future ... it has some unique advantages to meet the demand for drones in the military and civilian sectors".
This revelation comes after the Chinese government outlined its goals for all new vehicles to be fitted with a radio-frequency identification (RFID) chip.
Although the programme will initially be launched on a voluntary basis once it rolls out on July 1, it is said by 2019 it will be mandatory for new cars.
It has been put in place by China's Ministry of Public Security, along with the ministry's Traffic Management Research Institute.
According to documents seen by the Wall Street Journal newspaper, the RFID chips - placed on the windshield - could combine with devices on the side of roads to allow government officials to study and improve congestion and thus reduce pollution.
Another goal outlined is the hope it could halt the rise of vehicular terror attacks.