NRI Papers
No. 165 August 1, 2011
  China's Initiative for the Internet of Things and Opportunities for Japanese Businesses  
Taiichi INOUE, Akihiro HAYAKAWA, Takuya KAMEI

As a result of its remarkable economic growth, China became the world's second-largest economy in 2010. This rapid economic growth has led to mass migration into the cities, a trend toward motorization and the development of social infrastructure at a pace that has never been experienced by any of the developed nations. At the same time, however, it has also caused traffic congestion, serious air pollution and other problems. To address these issues, expectations are given to the use of information and communications technology (ICT).

One example of these efforts, as mentioned by Premier Wen Jiabao in August 2009, is the "Internet of Things (Wu Lian Wang)," which is currently attracting considerable attention and is positioned as one of the strategic emerging industries in the country's 12th five-year plan (2011 to 2015). The Internet of Things is a combination of an information and communications network and sensor technology making use of a range of sensors and RFID (radio frequency identification) tags, and is expected to contribute to resolving an assortment of problems associated with the explosive growth of China's economy and cities. Specific activities on this project are currently underway in many provinces and cities throughout China.

The Internet of Things is part of the concept known as the Ubiquitous Network in Japan, and is also a component of the Smart City. When we look back, since the period of high economic growth, Japan has employed the technology that was the most advanced at the time in an attempt to resolve various issues in fields such as transportation, logistics, manufacturing, disaster preparedness and environmental protection. Accordingly, Japan has accumulated experience and expertise in these activities, which gives it a good chance to enter China's Internet of Things (IOT) market.

The significance of the entry of Japanese companies into the Chinese IOT market would not just be limited to generating a source of revenue. It also includes establishing Japan-China partnerships toward developing international standards and contributing to addressing problems in countries and regions throughout the world by means of the Internet of Things. In January 2011, jointly with the Beijing University of Posts and Telecommunications, Nomura Research Institute (NRI) established the China and Japan Business Alliance on the Internet of Things, and commenced activities to develop proposals for China's IOT projects.

Contents
I Rapid Growth of Economy and Social Infrastructure and Informatization in China
II The Internet of Things (IOT) is Positioned as an Important National Strategy
III Opportunities and Challenges Presented to Japanese Companies by China's Internet of Things Initiative
IV Launch of the China and Japan Business Alliance on the Internet of Things

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