China Emerging As Big Player In RFID 2

China is quickly moving to take the dominant position in the use of radio-frequency identification technology, and could soon become the majority consumer. The country is preparing to launch several major initiatives supported by RFID, Rocky Shi, a consultant for RFID applications in China, told attendees at RFID World in Denver during the keynote roundtable on Wednesday. Others participating in the general session included Doug Ebert, VP of strategic development at McKesson; Pat Rary, manager of baggage strategy at Delta Air Lines; and Scott Stuart, president and CEO of the National Lifestock Producers Association.

Contributing to this technology explosion in China is Wal-Mart Stores Inc. From 2005 to 2007, the retailer's suppliers are estimated to use 5 billion tags annually on cases and pallets, Shi told InformationWeek. Analysts say between 60% and 70% of Wal-Mart's non-food items are shipped from Asia.

China also has initiated several national projects. For example, Chinese citizens will receive an identification card, meaning more than 1 billion RFID-enabled cards. Shi says China wants to eventually combine all applications, such as banking, driver's license, and credit, into one card.

In the health-care industry, China will launch a program to monitor and track bags of blood to prevent and monitor against AIDS and hepatitis contamination. China's population consumes up to 47 million bags of blood annually, and protecting it at the source has become a major project. And as the country continues to develop innovative use for the technology, it is taking into consideration possible compatibility issues with standards being developed in the United States and Europe.

Representatives from the Chinese government; Chinese National Academy of Standards, a group of professors and researchers; and EPCglobal, an arm of UCC.EAN charged with establishing electronic-product-code standards, will meet next week to discuss compatibility issues. "Without the standard you cannot share information, and the most important part of the information is the identity or the content," Shi told InformationWeek. "RFID is not a technology or product. It is a revolution. Companies need a vision and an enterprise strategy, and it will change the way industries conduct business by introducing new business models."

Most of the RFID chip technology still comes from U.S.-based companies. But this will change. As applications becoming accepted and volumes rise, U.S. companies will no longer have the capability to meet demand and new Chinese companies will emerge, Shi says. "Within the next three years, there will be a storm across industries in China," he says. "The driving force will come from both the Chinese government and business." China is expected to hold its first RFID conference in Beijing this September.