The underlying premise of smart technology is that with enough data you can predict anything. Our smart buildings and cities are filled with sensors to gather as much information as possible in order to provide analysis that can fix problems, improve environments, and even avoid issues before they happen. The only real debate around this topic is not so much about whether smart technology is able to improve people’s lives but what improvement looks like and who makes that decision. Unsurprisingly, that debate is at its hottest in places that generate the most data, and today, those places are unquestionably China’s smart cities.
Currently, China has around 800 smart city programs underway, which represents more than half of the world’s total smart city projects. Each city has invested huge amounts of money to develop a sensor infrastructure that will gather enough data to enact a wide variety of improvements for its citizens. In Hangzhou, for example, the "City Brain” is an AI-enabled system that uses big data and computing power to monitor, improve, and fix traffic problems. The program has successfully helped reduce traffic congestion by 15% since it was designed and implemented by Chinese tech-giant Alibaba and the municipal government in 2016.
China’s smart cities have also gained global recognition. During the digital edition of the Smart City Expo World Congress this year, Shanghai won the 2020 World Smart City Award for its People-Oriented Smart City digital infrastructure project. This achieved full 5G coverage in the downtown area and fiber optic coverage across 99% of the city, the “dual gigabit city” received a special commendation from the judges for its e-government initiative, an interactive smart city tool with over 14.5 million users.
“We are extremely honored to win this award,” said Wu Qing, Vice Mayor, Shanghai Municipal Government after the award was announced. “A city is a common residency for people, but also the most important location where new technologies and inventions are applied.”
Key to China’s smart city sensor infrastructure is video surveillance, which has grown rapidly across the country in recent years. In 2016, China was reported to have around 176 million video surveillance cameras in its streets, buildings, and public spaces. In the same year, the US had around 50 million video surveillance cameras, which may seem like much less but when you factor in populations that meant 0.16 cameras per person in the US in 2016 versus just 0.13 cameras per person in China in the same year. It is what has happened in China since 2016 that is truely reshaping the global video surveillance landscape.
According to the Beijing-based China Security & Protection Industry Association, the country's surveillance and safety industry doubled sales from 235 billion in 2010 to 490 billion yuan in 2015 as the sector established itself. However, the following five years saw sales of Chinese surveillance products almost double again, to over 800 billion yuan by 2020. The number of surveillance companies in China has also mushroomed, with many becoming the world leaders in the sector in recent years.
Six Chinese firms were among the top 20 global surveillance camera makers in 2018. This includes Hisilicon Technologies, a unit of Huawei, which is now the world’s leading core chip provider for surveillance cameras, and Chinese manufacturer, Hikvision, which has become the world’s number one surveillance camera builder, rising from 10th place just a decade ago. Their rapid growth on a global stage does not tell the whole story, however, as it is the Chinese market that is driving the vast majority of sales through the central government-led ‘Sharp Eyes’ smart city surveillance program.
“China continues to increase its share of the physical security product market. The Chinese market has grown rapidly through a boom in new construction and ‘Sharp Eyes’ surveillance projects driven by the public sector,” explains our latest report: The Physical Security Business 2020 to 2025. “However very little of this vast expanding market is accessible to overseas manufacturers, nor is it likely to be in the foreseeable future, with ongoing political and trade tensions between the US and China.”
The Chinese market has become the undisputed driving force of the global video surveillance industry and China’s manufacturers have grown to prominence on the world stage by serving that domestic demand. Less than 1% of Hikvision’s total revenue came from the overseas market, for example, but China’s domestic market is by no means isolated or self-sufficient. China has succeeded in developing a robust supply chain for low to mid-range surveillance products, it still relies on US components for more sophisticated deep learning technologies, such as artificial intelligence, machine learning, and facial recognition.
"Government spending [in China] is a major force building the industry," said Brady Wang of Counterpoint Research, who highlights the Chinese video surveillance market’s need for US-made components, and how the ongoing trade war between the nations holds back the whole sector. "If one link is broken, the whole industry will feel the pain,” Wang added.
The events of 2020 have had significant and direct impacts on the Chinese video surveillance market, leaving some uncertainty about the future. First, the COVID-19 outbreak in China caused supply chain disruptions in Q1 with knock-on effects for the domestic and global market. However, the use of video surveillance as a virus control system appears to have unleashed a new wave of demand for cameras from China’s smart city programs, unobstructed by any previous privacy resistance. Then, in November, Joe Biden’s victory in the US presidential election leaves the Trump-led US-China trade war in limbo until Biden’s inauguration in January.
Many may look at China’s recent smart city initiatives as another step in the over-surveillance of its heavily-controlled population, but few could dispute the benefits the technology provides for reducing traffic congestion, crime, terrorism, and even the spread of viruses. In fact, it would be reasonable to conclude that China’s surveillance cities are the smartest in the world because they are not held back by the privacy barriers seen in other markets. With the Chinese government now doubling down on its surveillance infrastructure, their cities will be the leading beneficiaries and victims of the full power of smart city technology in years to come.
How that development influences smart city development and the use of video surveillance in other markets in North America and Europe is yet to be seen. However, with the price of cameras being driven down by Chinese domestic demand and the case for surveillance rising during the global pandemic, the coming years will present a fascinating era for the video surveillance market and the smart technology hungry cities they serve around the world.