China’s smart tag market is projected to grow around 33.2 per cent per year, buoyed by government support and promotion, according to a report released Wednesday by Analysys International.

The research company, based in Beijing, expects the Chinese market for RFID (radio frequency identification) technology will reach around 5 billion renminbi (US$620 million) by 2009. About 3.8 billion renminbi will be spent on RFID products, 684 million renminbi for tag readers and 567 million renminbi for software and services, it said.

In 2004, China’s RFID market was more than 1.2 billion renminbi, according to Analysys International. Most RFID applications were in closed and proprietary application fields, with software and services accounting for only 7.1 per cent of the market, the company said.

The market has been slightly restricted by the technology’s high price and interoperability problems caused by inconsistent standards between vendors, according to the report. Large-scale deployment of RFID in retail environments is unlikely in the next five to 10 years, it said. As standards evolve and prices fall, RFID is expected to catch on, it said.

The Chinese government has an ID program that uses RFID technology and also has another program underway to use smart tags in the livestock industry, the report said.

The three central areas for smart tag development are Beijing, Shanghai and the Pearl River Delta, centred around the high-tech industry.

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