State-sponsored projects continue to be the biggest driver for RFID adoption in China, but other markets such as telecoms also provide potential growth, according to CCID Consulting.
China's RFID market reached more than 7.7 billion yuan (or approximately $1.08 billion) in sales last year, according to CCID.
A major highlight for RFID applications is its applications in electronic tickets for this year's Beijing Olympic Games.
In particular, though, the biggest market for RFID applications in China is in the issuance in the massive issuance of the second generation citizen ID cards.
Last year saw a slight downturn in the scale of RFID deployments in the transportation sector, although this sector remains a major market, CCID said.
China's Ministry of Information Industry released guidelines for RFID on the 800/900MHz spectrum last year, which specified the trial operation frequency bands for UHF RFID technology in China as 840-845MHz and 920-925 MHz.
This regulation provides strong support for the development of the RFID industry in China, especially large scale RFID applications. Other RFID standards are also being drafted by the government.
CCID also noted a huge market for NFC (near field communications) - based handsets in China, citing initiatives from manufacturers Nokia and Motorola. Pilot programs using NFC technology have been launched in some cities, CCID added.