Features

Delays and Uncertainty Challenge RFID Standards in China

By Sophia Mayengbam

China is the largest supplier of products to manufactures globally and China alone imports over 70 percent of the more than USD 200 billion worth of goods in the Asia Pacific region. However, China’s supply chain is highly fragmented and the supply chains are inefficient and most of the large corporations outsource logistics to third-party logistics providers. In order to improve the country’s logistics infrastructure the Chinese government has in recent years has given increasing emphasis on the adoption of RFID. RFID technology arrived in China in an unprecedented manner, with over 100 million tags shipped in 2005, according to In-Stat. The firm had forecast that more than 2.9 billion tags would be shipped by 2009.

But the government’s initiation to adopt RFID technology in its supply chain realm has not progressed much. The government has remained silent from the initiative.

According to ABI Research, silence from the national government and aggressive marketing by EPCGlobal are combining to create a climate of uncertainty around the issue of RFID standards in China. While official efforts toward setting a Chinese RFID standard remain in limbo, the challenge for the near future will be the rapidly changing conditions "on the ground."

In July 2006, EPCglobal's UHF Generation 2 air interface protocol was incorporated into the ISO/IEC 18000 6 Amendment 1, as Type C. But according to ABI Research analyst Junmei He, "As the RFID standard issue enters a new stage aimed at speeding up the adoption of RFID tags globally, the Chinese government remains silent about where the national RFID standard is heading."

One month previously, a Chinese RFID technology policy whitepaper was published, in which the national standard issue wasn't even discussed. Meanwhile, EPCglobal is seizing the initiative. In April 2006, EPCglobal Hong Kong launched its EPCglobal Industry Support Program (EISP), to lend financial, technological and implementation support for EPC adoption in enterprises across Hong Kong and Southern China.

According to ABI the Chinese government is now facing at least three challenges to setting up its own standard:

First, Chinese manufacturers' partners in the supply chain will require them to use RFID tags complying with international standard, EPCglobal UHF G2
At the same time, foreign clients of Chinese manufacturers, who are planning to adopt RFID, will request that shipments carry tags complying with the EPC UHF G2 standard.
Finally, EPCglobal's aggressive move in the heartland of Chinese manufacturing is now turning the EPCglobal UHF G2 standard into a de facto standard on the mainland

"The reality is that for the Chinese government, it is no long important when the national standard will be released. It is late already," says He. "More urgent problems are to decide how the government should cooperate or negotiate with EPCglobal; to establish policies to protect the development of the domestic RFID industry; and to secure the benefits of RFID for Chinese tag users in the coming RFID era."


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