Insigts of The Current Development of China's Smart City Market

Source:iResearch May 15,20199:30 AM
As one system project with public facility nature, smart city construction requires guidance and promotion from local government. Thus, the number of government-entrusted smart city construction programs in one area can to some extent be an important quota that reflects the prosperity of the smart city construction industry in one place. Published data from the government show that the number of bid-wining smart city projects entrusted by local government surged from 12 in 2013 to 162 in 2018 with a compounded annual growth higher than 45%. East China, North China and Central-South China are the most popular places for smart city programs and took up 70% of the smart city market. Meanwhile, relatively developed areas on the sea shore have significantly more programs than other areas.

Currently, strategy design and planning related to smart city has the largest share among all the local government entrusted programs, indicating that smart city development in a lot of areas is still in its initial stage of development. Meanwhile, city operation management, city government affairs, city big data, transportation and city emergency-related programs have fast growth with a yearly compounded growth higher than 40% throughout 2014-2018. Projects in smart city affairs and city safeguards are of relatively large scale, while the growth rate decline in number of projects suggests that the markets are gradually mature.

According to the published information on invite and tender bidding of smart city projects from the government and the statistical model by iResearch, the market size of smart government in China’s smart city market reached 21.84 billion Yuan in 2018. Reflecting on the development of the industry, we can find that the first round of government-dominated smart city construction concentrate on 2015 to 2018. and now after the industrial booming, the industry entered its stable development stage. iResearch forecasts that government-dominated smart city construction market will maintain a relatively stable growth in the next three years. 
Smart upshifts in the government laid foundation for the construction of other smart city segments and had guidance effect for the following projects, which was only one out of many smart city application scenarios. iResearch holds the opinion that smart city should include not only smart government but also smart community, smart retailing and other application scenarios, and they are expected to enter its growth stage in the next three years. iResearch estimates that China’s smart city market size will exceed 600 billion Yuan by 2020. 

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