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IoT in China: A New IoT World Leader?

Shanghai, China at night
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Chinese IoT Market Share in 2024

With its fast-growing economy and ambitious public sector support, China has established itself as the dominant force in the Internet of Things (IoT) landscape outside of the Americas, with immense potential for growth in the coming years.

The Asian giant has ambitions of being the world leader in IoT technologies, with China estimated to generate the highest revenue in the IoT market, according to Statista.

The current Chinese market is estimated to be valued at a staggering US$576.8bn by the end of 2024 with over 5 billion IoT devices, highlighting its dominance in the Internet of Things landscape.

Moreover, the Chinese market is expected to experience a Compound Annual Growth Rate (CAGR) of 13.4% over the next four years, resulting in an estimated market volume of US$953.8bn by 2028.

This extreme growth highlights the power of IoT, especially with it being a technology with the potential to be applied in all sectors.

Increased adoption in the manufacturing and automotive sectors are key drivers of this economic growth, with China’s influence expected to spread globally as the country pushes its IoT initiatives.

Additionally, involvement from Chinese tech giants, such as Huawei Technologies, is crucial in China’s IoT market following their heavy investment in IoT research and development.

As these companies continue to innovate and introduce new IoT products, this will only further solidify China’s position as a global leader in the IoT landscape.

Forbidden City and clear sky in Beijing, China

Public Sector Support: Internet Plus and Made in China 2025

Internet Plus and Made in China 2025 are two government-backed initiatives and policies that have already played a key role in the acceleration of China’s IoT market.

Under these initiatives, the Chinese government is encouraging and supporting companies to adopt IoT technologies in their operations and products.

This support includes providing subsidies for IoT projects, promoting collaboration between industries and research institutions, and developing IoT-focused industrial parks.

Internet Plus

Launched by the Chinese government, the Internet Plus initiative aims to integrate the internet with traditional industries, catalysing economic growth and bolstering the development of China’s IoT market.

This ambitious strategy aims to decrease dependency on non-domestic technology innovation by providing more funds for research and development.

Increasing broadband connectivity is a key component of the Internet Plus strategy, with plans to provide broadband access to 98% of the country alongside 100 MB/s internet connections for people in large cities.

By fostering a more interconnected and technologically advanced industrial ecosystem, Internet Plus serves as a catalyst for transforming and upgrading China’s economic structure.

China aims to solidify its position as a global leader in IoT technologies, ensuring that the nation’s IoT market continues to expand at an impressive rate, underpinned by strong government support and substantial investment in digital infrastructure.

Made in China 2025

The Made in China 2025 policy is another major initiative launched by the Chinese government, intending to transform China from a manufacturing giant to an innovation leader.

The government-led program aims to increase Chinese manufacturing independence by focusing on improving and streamlining the development of next-generation information technologies, advanced robotics, artificial intelligence (AI) and other emerging technologies.

This moves away from the manufacturing of lower-quality tech goods, which has gifted China the nickname of the “world’s factory”, will see China focus on producing high-tech products and becoming a leader in innovation.

The Made in China 2025 policy focuses on 10 key industries including agriculture technology, emerging bio-medicine, aerospace engineering, high-end rail infrastructure, advanced electrical equipment, high-tech maritime engineering, and new synthetic materials.

Heavy state funding and support for these key sectors could increase Chinese-domestic content or core materials by up to 70% by 2025.

This all-encompassing approach of integrating key sectors with the integration of big data, cloud computing and emerging technologies has seen the Made In China 2025 policy draw comparisons to Germany’s Industry 4.0 plan.

Shenzhen, China during daylight

Use Cases and Adoption of IoT in China

The automotive (US$205.5bn), manufacturing (US$135.5bn) and consumer (US$80bn) sectors are the three leading IoT markets for IoT in China.

According to data from Statista, by 2028 these IoT markets will grow to US$377.8bn (automotive) US$225bn (manufacturing) and US$99.26bn (consumer) respectively.

Typically, manufacturing is the first thought that comes to the public’s mind when considering industry in China.

However, data shows that China’s leading IoT market is in fact the automotive sector.

A combination of connected car technologies, smart transportation infrastructure and government initiatives have propelled the Chinese automotive sector to become the largest IoT market in China.

A result of this success has been that manufacturers are now incorporating IoT technologies into their vehicles, such as advanced driver-assistance systems (ADAS) and connected infotainment systems, to improve safety, efficiency, and user experience.

Between 2024 and 2028, the Chinese IoT automotive industry is expected to experience a staggering CAGR of 16.44%

As mentioned, China is renowned for its blend of both discrete manufacturing and hybrid manufacturing, and this is expected to grow even further with the exponential growth of smart technology.

Advanced smart technology will enable China to make further strides, with it being the hub of global manufacturing and production.

By embracing IoT technologies and implementing connected devices such as sensors, manufacturers can enhance operations by improving supply chain management, increasing efficiency, and streamlining production processes.

China’s third most populous city, Shenzhen, is a key hub for China’s manufacturing industry and is also known as the “Silicon Valley of Hardware”.

With the government’s support, Shenzhen aims to become a truly “smart” city, with over 2000 IoT pilot projects already being implemented in various sectors such as transportation, healthcare, and public safety.

Real-life adoption of IoT technology can also be seen across China’s several smart cities, including Beijing, Shanghai, Guangzhou, Hangzhou, and the aforementioned Shenzhen.

From smart street lighting and traffic management systems to smart energy grids and waste management, these cities are leading the way in incorporating IoT into their infrastructure for improved efficiency and sustainability.

However, the adoption of IoT technology in China is not limited to just the automotive and manufacturing sectors, as the consumer sector is also experiencing significant growth.

The adoption of smart home devices, wearables and other connected consumer products has become increasingly popular, with the market size expected to experience a CAGR of 3.06% by 2028.

This growth can be attributed to a combination of factors such as rising disposable incomes, increased tech-savviness among consumers and government initiatives promoting smart living.

The Great Wall of China

Concerns within China’s IoT Market

China presents certain challenges for some MNOs (Mobile Network Operators) and MVNOs (Mobile Virtual Network Operators) looking to provide services in China, as the Chinese Government has strict regulations on foreign participation in the telecommunications industry.

Fortunately, some telecom providers, such as Caburn Telecom, have legal third-party agreements in place with providers that have legitimate access to Chinese cellular companies such as China Mobile and China Telecom. This enables legitimate IoT connectivity in China and cost-effective roaming services elsewhere in the region, via the Chinese MNOs as roaming providers.

In addition to these initial roaming challenges, the exponential growth within the Chinese IoT market has seen a staggering increase in new IoT platforms, technology and devices emerge.

Without specific agreements in place for services from companies like China Telecom, MNOs may find it difficult to integrate these new technologies and devices into their existing IoT offerings.

This uneven IoT landscape in China poses a challenge for MNOs looking to enter the market, as they must navigate complex partnerships and agreements to provide comprehensive IoT services to their customers.

Furthermore, there are concerns over data privacy and security within China’s IoT market. As more devices become connected to the internet, the potential for data breaches and cyber-attacks increases.

The Chinese government has implemented regulations to address these concerns, but it is still an ongoing issue that must be carefully monitored.

Conclusion

China’s IoT market shows no signs of slowing down, with continued investment from both the public and private sectors driving growth and innovation.

With initiatives like Made in China 2025 being supported by astonishing advancements in AI, high-tech and smart manufacturing, China is on track to remain as one of the most vitally important countries within the IoT space.

Through strategic partnerships and adapting to changing regulations and technology, companies like Caburn Telecom are well-equipped to help businesses navigate the complex landscape of China’s IoT market and provide our clients with the best possible IoT solutions.