China's Dirty And Congested Cities Will Become "Smart" Faster Than Anywhere Else

Despite horrid pollution and congestion, Chinese cities might become "smarter" than any other city in the world.

That's the conclusion of a Ernst & Young research report on China's machine-to-machine (M2M) market, which means direct communication between connected devices such as smart meters, smart grids and smart cities.

China's M2M market is already leading the world, with 74 million cellular M2M connections and accounting for a third of the global M2M connections at the end of 2014.

It is expected to grow at 29% compound annual growth rate (CAGR) until 2020, further extending the gap between its leadership position and other slower adopters.

China spent US$4.3 billion in smart grid investments in 2013, ahead of the U.S. The State Grid Corporation planned to install 300 million smart meters by 2015 and up to 380 million by 2020, reaching a penetration rate of 74%.

There were over 320 smart cities in China by April 2015. The market value for smart cities is expected to reach US$28 billion in 2020.

"Support from the Chinese Government and its mandate for China to become a nation of smart cities has been crucial to building the necessary critical mass for M2M," says Steve Lo, Greater China Technology, Media & Telecommunications Market Segment Leader at Ernst & Young.

In 2009, former Premier Wen Jiabao initiated the concept of "Sensing China" in order to develop sensor networks. Subsequently, China’s Five-Year Development Plan (2011-2015) prioritized the development of Internet of Things (IoT).