A new report from Research and Markets, shows that the RFID market in China crossed RMB1.6 billion in 2005 and is expected to grow swiftly in coming years. Presently the market is driven by the mandates issued by Wal-Mart and other European retailers.

China is expected to use more than 5 trillion tags annually in supplies to Wal-Mart. But in coming years China will be a large consumer market for RFID products as well. RFID technology will also be used in 2008 Olympics to be held in Beijing.

Chinese RFID market is divided into two technologies i.e. the low frequency products and the high frequency products. The use of UHF frequency is not yet in full flow because of the problem of standards.

The Chinese government wants to have its own standards to avoid paying royalty but it also working on to develop a standard, which is compatible with current standards. The current applications of RFID in China are in the field of identification, logistics, ticketing and so on.

Second generation ID cards hold the major pie in current applications of RFID. In coming years, it is expected that major use of RFID in China will be in government, transportation and manufacturing industry. However use of RFID in retail will come later.

It is the Chinese government that is actively participating in the adoption and implementation of RFID in China. The government has introduced several projects to push up the development of RFID in China. The government has analyzed that sooner or later the use of RFID tags will be mandatory and so they have started planning for it. Chinese government is also planning to improve the current logistics infrastructure so as to keep pace with the growth in manufacturing.

Government has setup a working committee in Shenzhen to promote RFID applications. Last year, RFID development and applications were considered a major project of the China Golden Card Project.