Industry News

As we all know, IC card market in China is a newly emerged market growing along with the development of national golden card project construction, and at the same time, prosperous smart card industry and its industrial and regional IC card application start to grow fast. Domestic smart card industry has quickly developed into another increasing point of national economy and brought world attention to smart card market in China. Currently, IC card application in China has been spread into every corner of the land and accepted by various industries, it is offering great help for coordination between development of national economy and social development and has made outstanding contributions to the construction of IT application industry in China. According to statistics issued by the authoritative department, till the end of Dec, 2004, China has issued more than 1.6 billion IC cards, which makes it the most important component in IC card application market around the world.

In recent years, major projects promoted by government commenced quickly which again became the motive power driving fast development of smart card industry in China. From accelerated bank card tran-bank network construction and commissioning of Transportation All-in-Card, to the renewal of second generation ID card around China, smart card industry, which already runs on fast lane, gained accelerated development speed under such good opportunities.

Till the end of July 2004, China has issued more than 700 million bank magnetic cards, which made it the largest one in card application market. Meanwhile, transfer of EMV around world will also exert certain influences on current magnetic card in China. Relevant departments in China are now taking measures to establish bank IC card transfer plan. New business opportunities are emerging for breakthrough development of bank IC card market in China. It is estimated that cost for EMV transfer of all banks in China will amount to over 10 billion RMB. From 2005, China will gradually deploy EMV terminals or upgrade to the level compatible with EMV. As predicted, before 2007, IC card transaction environment will be basically available in Beijing and Shanghai and nationwide EMV transaction environment will be finally established. This will bring tremendous opportunities and challenges for IC card industry (no matter for card manufacturers, terminal manufacturers and software industry) in China.

Started from April 2004, new action of changing more than 1 billion traditional paper ID cards into smart cards has largely stimulated morale of card industry. To the end of Nov 2004, 2.86 million pieces of new intelligent ID cards have been issued in six provinces around China; full-scale action will be initiated from 2005. As estimated, more than 200 million new cards will be issued annually from 2006, and a scoring issue of 900 million cards will be realized until 2008. This can be the largest IC card application project in history which will be finished within four to five years. Potential market demand for card readers compatible with new ID card will also amount to 4 million to 5 million sets.

For tax control cash register, in April 2004, Ministry of Finance and Ministry of Information Industry together with State General Administration for Quality Supervision jointly made the announcement that, industries like retailing, catering, entertainment, service and transportation, etc., which are suitable for tax control cash register application, must choose to use the equipments in future business operation. With joint promotion and close cooperation of four departments, laws and regulations on tax control cash register application have all been worked out in 2004, and at the same time, relevant standard and administrative measures have also been announced, according to primary analysis, market consumption ability could achieve 7 million sets nationwide and about more than 20 million tax IC cards will be attached.

Smart label is a typical product of RFID (Radio Frequency Identification). According to rough estimation, potential demand on smart label product will amount to tens of billions RMB in the coming years. To accelerate research and development of RFID products with self intellectual property right and its promotion are not only the emphasis and market target of national golden card project in the following developing stage, but also has great strategic significance and social-economical benefits for IT application development in China.

Currently, Smart label has been a new market focus in smart card market in China. Among various relevant products: Student electric ticketing project will have a demand of about 10 million cards; smart label will also be used on measuring meters like water meter, gas meter and heat meter, etc. The total demand will exceed 30 million pieces around China and 2 million cards have already been issued in 2004. Furthermore, more than 50 million various certificates and licenses (Temporary residence certificate and various licenses in relation with vehicles, etc) will be issued in China annually. Without doubt, smart label industry will be another highlight in boosting domestic economic growth in future several years.