Will China Become An IoT International Power?
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The Internet of Things (IoT) is network of uniquely identifiable endpoints (or “things” that communicate without human interaction using IP (Internet Protocol) connectivity. The network is highly fragmented and largely consists of smartphones, wearable devices and homeware, although the technology is now being developed towards “smart cities” – cities that digital network technology across all of their functions.
Many countries across the world are racing to implement IoT technologies in larger scales and China is no different. The second largest economy in the world is now preparing to integrate IoT technology, which will bring billions of devices into the cyber-physical realm.
China’s huge internet user base – the largest in the world – provides a strong foundation for the sector to be developed. Other strengths China possesses are those of hardware and software, as China is the manufacturing center of the world.
The Chinese central government has identified early on the development potential of IoT. As early as 2010, a national IoT center was established in Shanghai. In 2012, the Ministry of Industry and Informational Technology (MIIT) announced the key sectors in which it would promote IoT development with pilot projects, including industrial security, agriculture, financial services, smart grid, intelligent transportation systems, logistics, healthcare and public safety. The government is also backing its IoT vision with generous funding. Last year the MIIT announced a funding equivalent to $8 billion for investment in smart cities research and projects.
China’s IoT market has grown expeditiously as well, with a growth from $27 billion in 2009 to more than $82.6 billion in 2013, with annual growth of more than 30%.
There are, however, a number of problems in the development of the IoT market in China. One of these is market fragmentation, which, if not addressed, may prevent the market from growing. China has answered this problem with a “reference architecture for IoT” proposal approved by the International Organization for Standardization in 2014. The U.S., South Korea, Canada and Australia are now working together with China to develop IoT standards.
