Niraj
Director – Publications
[email protected]
Rapid industrial restructuring over the past three decades has helped China transform itself from a traditional agricultural society to a modern industrial society. In the last decade, China has emerged as the fastest growing economy in the world. This has enabled sectors like infrastructure, transportation, urban development, environment, natural resources and information technology to grow tremendously.
Towards the end of its 11th Five-year Plan (2006-2010), China overtook Japan to become the world's second largest economy, next only to the USA. In a significant shift, China is emphasising on 'quality growth' in its 12th Five-year Plan, moving away from the previous stress on rapid GDP expansion. It is putting more emphasis on the internal markets and domestic demand than ever before. Geospatial technology is emerging as an important component in businesses, healthcare, trade, government, security, transportation, media and tourism in China. Growth Potential
The growth rate of China's geospatial industry exceeded 300 percent during the 11th Five-year Plan (2006-2010) and the annual output value stood at nearly CNY 100 billion ($15 billion) in 2010. Geospatial technology is very much on government agenda in the current 12th Five-year Plan (2011-2016), with the annual output value expected to reach CNY 200 billion ($30 billion) by the end of the current Plan. The average annual increase of geospatial industry in China is over 25 percent. Presently, more than 400,000 people are working in the industry and new geographic information enterprises are being established almost every day.
In its new Plan, government has identified seven new strategic industries, known as Magic Seven: information technology, energy saving and environmental protection, new energy, biotechnology, high-end equipment manufacturing, new materials and clean energy vehicles. Substantial amounts of public investment and policy support to these areas are expected to push the total value-added output of the new industries to represent 8% of China's GDP in 2015 and 15% by 2020.
MARKET STATUS
Here is a quick look at the status of geospatial industry in China, segment-wise:
Surveying and mapping
This is the largest segment of geospatial industry in China. With public demand for geographic information skyrocketing, there has been a phenomenal increase in the number of agencies involved in data processing. According to a survey, over 20,000 enterprises have the certificate for providing surveying and mapping services.
China has built a national standard system for surveying and mapping. It has developed a database with full coverage of the country at 1:1 million, 1:50,000 and 1:25,000. There are a few provinces covered with geospatial information at 1:10,000. China has been collecting rich remote sensed imagery and aerial photographs. Paper topographic maps have been replaced with 4D data namely, DEM, DOM, DLG and DRG and established geospatial databases.
Satellite navigation
This is one of the emerging industries identified by the government. The Ministry of Industry and Information Technology, Ministry of Science and Technology and Ministry of Finance are involved in developing a blueprint for China's satellite navigation industry. Government is expected to expand the direct financing scale in order to guide and support qualified companies to get listed in overseas markets. On the other hand, the Ministry of Science and Technology and Ministry of Finance would provide funds to support relevant companies. China has its own satellite navigation system – The Compass/BeiDuo, consisting of five geostationary satellites and 30 non-geostationary satellites. The full deployment of the system will be completed between 2015 and 2020. The size of the Compass satellite navigation industry was over CNY 400 billion ($60 billion) in 2010.
Remote sensing and aerial photography
Over the past few decades, China has developed capacities in space-borne and air-borne remote sensing platforms, satellite ground stations and data processing and application facilities. A global spaceborne-airborneground earth observation system has been developed to improve the national, regional and global ability in responding to emergencies, to solve resource and environmental crises and to enhance human health, security and well-being. The earth observation satellites launched by China include four for meteorology, two for oceanography, seven for resources, four for navigation positioning and over ten science experiment satellites. First built in the 1980s, the aerial remote sensing system of China has served the country for over 30 years. Another new system will be built during the 12th Five-year Plan. China has developed high-efficiency applications characterised by the integration of satellite, airborne and ground data.
GIS
Chinese government encourages the use and development of indigenous GIS systems and they have successfully implemented many government projects. The demand for this technology is being driven by infrastructure and defence sectors. Further, tier 2 and 3 cities have been strong adopters of this technology. However, lack of adequately trained resources continues to be a major challenge for the growth of this industry. Enterprise-level solutions are the norm in mainland China and they occupy about 50% of the GIS market.
Surveying equipment manufacturers
China is known for manufacturing qualitative and competitive advanced surveying instruments like total stations and theodolites and other equipment like UAVs, GPS receivers, digital photogrammetry systems and image processing software. Currently, 80% of the survey equipment used in various infrastructure and construction projects is manufactured in China itself. With government investments doubling in projects like high speed railways, land management and mineral resources, the dominance of these manufacturers will be even more.
BUSINESS DRIVERS
Let us have a glance at the important business / market drivers for the geospatial industry in China.
Government investment and initiatives
China has formulated plans to deeply understand and correctly follow the new changes and characteristics of the situation both within and outside the country, in order to push forward its modernisation drive. In the next five years, China will continue its strategy of expanding domestic consumption, while seeking a new phase of economic growth boosted by consumption, investment and export. China plans to promote the modernisation of agriculture and increase the competitiveness of the modern industrial system.
Digital China Geospatial Framework
The Chinese version of National Spatial Data Infrastructure is called Digital China Geospatial Framework (DCGF). DCGF is a blueprint to develop digital regions, digital cities and digital villages. Its objective is to enrich geospatial information resource and supply easy geospatial information service to the public. As a base of national information, DCGF is being implemented at national, provincial, municipal and county levels. DCGF is made up of a comprehensive global positioning service network, a national primary scale topographic map and a national geographic information service platform. Till date, 130 cities have been covered under the Digital China initiative by State Bureau of Survey and Mapping under Ministry of Land and Resources. All the prefectural-level cities will be digital in the next five years. Zhao Lu, Vice President, WorkVision says, "Most of the users of the geospatial tech are government agencies and they have realised that techniques like 3D modelling are very good tools for enhancing governance and promoting businesses."
Mining
China controls more than 90% of the global supply of rare-earth metals-a group of 17 elements usually referred to as '21st century gold' for their importance in high-tech applications like laser-guided weapons, aerospace, electronics and hybrid-car batteries. These metals are also strategic non-renewable energy resource. The rare earth industry is still in nascent stage and the healthy development of the industry has been affected by the lack of high-end applications and a confusing export policy. However, in its 12th Five-year Plan, government has emphasised on restructuring the rare earth industry by improving the technology used in mining, smelting and application development of these metals. This move is expected to give a big boost to the local geospatial industry and an opportunity to multi-national geospatial companies.
West China development
Eastern part of China has made great progress in terms of comprehensive economic growth, living standards of the people and environmental protection. But foreign investors are beginning to grow weary by the increasing costs of doing business in cities like Shanghai and Shenzhen. Although China's coastal regions continue to develop, the initial boom has subsided. Both international and domestic businesses have their eyes perched on the interior of the country, where overhead costs are lower and the cities are building necessary infrastructure to support growth. China's vast western region, which comprises of a whopping 70% of China's landmass and 28% of its population, will be perhaps the most exciting economic development story of the next decade. It currently accounts for 17% of the country's GDP, but that is set to change for the better.
The State Council has also approved a programme to develop the region on the west side of the Taiwan Strait. The Western Taiwan Strait Economic Zone covers nine cities in southeastern Fujian Province including Xiamen, Fuzhou and Quanzhou and 11 cities in the neighbouring Zhejiang, Jiangxi and Guangdong provinces. According to the development programme, the Western Taiwan Strait Economic Zone aims to develop itself into a region characterised by balanced development.
Infrastructure
A number of infrastructure projects have been initiated by the government in mainland China. The two notable segments among them are:
- High speed railways: In 2009, China became the world's largest automaker, surpassing the United States and is aggressively making jets to compete with Boeing and Airbus. China now leads the world in high-speed trains. After years of major investment in highways, China is now investing billions in building cutting-edge network of trains and subways designed to boost exports and revolutionise the flow of people and goods in the world's fastest-rising economic powerhouse. The country is investing heavily to expand its railway system by 2020. It aims to build at least 30,000 kilometers of track over the next few years, nearly half of it for high-speed trains.
- Water infrastructure: China is expected to invest CNY 4 trillion Yuan ($ 600 billion) in the construction of water resources facilities in the next few years, according to sources in the Department of Water Resources. The government will levy 10 percent of rural land transfer payments on building agricultural water resource infrastructure in the future. Such move comes as China realises the indispensability and shortage of water resources; weak water resources equipment that now limit the country's economic development, the inferiority of farmland irrigation installations threatening the country's agricultural industry and grain security, in addition to numerous floods and drought disasters that have recently plagued many regions. In 2011, the government will stress on the construction of water resources facilities in rural areas, ameliorate drought resistance in southwestern areas, build key projects like Taihu Lake, Dongting Lake and Poyang Lake and take steps for water and soil conservation.
STAKEHOLDERS
There are a number of agencies in China playing an important role in the overall development of geospatial industry in China. The major players can be identified as:
State Bureau of Surveying and Mapping (SBSM), Ministry of Land and Resources
State Bureau of Surveying and Mapping is the nodal national survey agency of China. Its responsibilities include mapping for emergency issues and coordination of geospatial industry. With increasing demand for geographic information products and services, SBSM explicitly points out its three priority areas – Digital China Frame-work, modernised surveying and mapping systems and geospatial industry. It is formulating a new map policy to make geographic information resources currently with the government to be gradually available to enterprise interested in the development of public geographic information products. SBSM is playing a key role in building the Geographic Information Industrial Park with an investment of CNY 15 billion ($ 2.25 billion) which is scheduled to be operational by 2013. More than 100 geospatial companies are expected to set up shop in the park.
National Remote Sensing Center of China (NRSCC), MOST
The National Remote Sensing Center of China (NRSCC) is a sub-division of the Chinese Ministry of Science and Technology (MOST). NRSCC formulates national policies and long-term plans for the development of remote sensing science and technology, including GIS and satellite navigational technology; to coordinate amongst different departments in implementing nation-wide projects to promote remote sensing research and applications; to improve international cooperation by organising joint projects, seminars and exchange visits; to provide technical services in the form of training, consulting and data collection and management. It also acts as the nodal point to liaise with international organisations.
Satellite Surveying and Mapping Application Center (SASMAC), SBSM
The Satellite Surveying and Mapping Application Centre was established in 2009 and is directly administrated by SBSM. The main responsibilities of SASMAC are to draw plans for satellite surveying and mapping applications management and maintenance of data processing and conducting relevant scientific researches. It also carries out international exchange and cooperation in the field of satellite surveying and mapping, promote sharing of cartographic satellite data, products and related technologies; rapidly capture and process geographic information for public emergencies and provide emergency surveying and mapping services.
Center for Earth Observation & Digital Earth (CEODE)
The Center for Earth Observation and Digital Earth (CEODE), Chinese Academy of Sciences (CAS), was established on August 27, 2007 through consolidation of three CAS units: Remote Sensing Satellite Ground Station, Center for Airborne Remote Sensing and Laboratory of Digital Earth Sciences. As an institution noted for combining both scientific research and professional services, CEODE is committed to high-quality operation of aerospace earth observation system and related data services; exploration of cutting-edge technologies for earth observation and their application demonstrations; theoretical and technological research on key issues concerning Digital Earth and their integrated applications at global, national and regional scales and the establishment of a research platform for Digital Earth.
Laboratory of Cartographical, Remote Sensing and Information Engineering, Wuhan University
For many years, the Wuhan University of Surveying and Mapping was the centre for surveying and mapping education and research in China. It recently merged with Wuhan University which now hosts the State Key Laboratory of Information Engineering in Surveying, Mapping and Remote Sensing. The Laboratory undertakes research in the following disciplines: aerospace photogrammetry, remote sensing image information processing, spatial information systems, precision and spatial orientation, 3S integration and spatial information services, multimedia communications and marine monitoring and Digital Engineering Research Center.
Ministry of Environment Protection
The Ministry of Environment Protection is responsible for the implementation of national policies and plans for environmental protection, draft laws and regulations. It also formulates administrative rules and regulations for environmental protection. Under the 12th Five Year Plan, technology for environmental monitoring and management has been identified as one of the 11 most important areas of planning. The plan emphasises on geospatial technologies which can integrate information from different sources. The prevention and control of water, air and soil pollution, the protection and recovery of ecology and research on global environmental issues are the other five areas and tasks. 24 national key laboratories will be built in the next five years and a third of them emphasise on or relate to geospatial technologies.
CHALLENGES AND PRECAUTIONS
Despite several factors favouring the growth of geospatial industry in China, there are few areas the industry needs to keep a watch on.
Spatial data availability
All the ministries and government departments in China have their own data but the policy limits the use of geospatial data and there are restrictions on spatial data acquisition. With changing lifestyles, domestic demand for various kinds of data is on the rise. Government is keen on introducing a policy to guide the availability of spatial data and define the norms to share data. Rapid economic growth has resulted in the state, provincial and municipal level governments utilising the benefits of geospatial technology through a standard data infrastructure which is being defined by State Bureau of Surveying and Mapping. With more players emerging with their own navigational datasets with in-built value additions, the sheer competition might segregate the consumer base. Government has to play a crucial role in defining the standards and the level of accessibility of these data and keep a check on the authenticity of the data being produced and shared.
Plethora of companies
Greater awareness and utility of geospatial technology has resulted in the mushrooming of geospatial companies in China. There are thousands of companies in China today as compared to only 20 companies in 1990. Small and medium-sized companies take the lead with about 80% of companies' registered capital between CNY 500 thousand and 2 million and only 20% about CNY 10 million.
There are a few large private owned enterprises but most of them are state-owned enterprises with research orientation. A multitude of geospatial companies compete with each other and the division of the industry in not clear. The industry is short of comprehensive specialists for enterprise management and marketing. Most of these companies are scattered and work in isolation.
Lack of core technology knowledge
Lack of knowledge in core technology like high accuracy GPS technology has hindered the growth of the domestic manufacturers in this segment where they majorly depend on international agencies. The OEM owners have a great opportunity to do business in China and the domestic industry is gearing up to manufacture instruments compatible with GPS, GLONASS, Galileo and BeiDuo navigation.
Weak IPR policy
The weak intellectual property rights (IPR) policy has discouraged international companies to venture into China of late and this has kept China's geospatial market away from latest technological advancements in this domain. Government is keen to implement intellectual property strategy, improve the intellectual property legal system, strengthen the creation, utilisation, protection and management of IPR and improve IPR Law enforcement.
Rise in labour cost
According to a recent survey, China now has the third highest labour costs in emerging Asia in terms of combined salary and welfare payments. This situation is particularly true in the east region of China. This has resulted in companies shifting their bases to other regions in China where labour costs are still affordable.
Insufficient training facilities
There are over 200 GIS labs in various universities across China but there is a lack of training for the the latest products and software that are available in the international market, due to the differences in the teaching system and mode of teaching as compared to other countries.
Demand-supply gap in trained human resources
Large Chinese companies are aggressively eyeing the international market for the delivery of their software and solutions. There is a need for trained and experienced human resources for the enterprise management and marketing. There has been a lack of these talents as most of the companies are operated by scholars or specialists.
CONCLUSION
The geospatial industry in China has been growing by leaps and bounds, mainly due to the domestic demand and government support. This is evident from the fact that the average annual growth of geospatial industry in China is over 25%. However, there is a need to establish a strong and mature geospatial industry with international competitive advantages. The government needs to get active in formulating the national spatial data infrastructure and play a crucial role in regulating the market with respect to the use of geospatial data, IPR issues, policy and standards. The industry, on the other hand, should raise its bar and explore the international market.
