The development of smart transportation has implication on how Chinese population, especially the more than 800 million urban residents, are going to commute in the future. It also brings forward multi-trillion dollar infrastructure investments and innovations that will change the way people live in China. AskCI Consulting predicts that the market size of the smart transportation industry is expected to exceed 140 billion RMB in 2023. In this two-part series, we will look into the development of smart transportation in China and the future trends we perceive in the first part.
The concept of smart transportation has been under the radar of Chinese city governments for many years, generally considered under the broad topic of smart city. However, it was not until recently that the concept has been put on the top of the policy agenda. The recently held Fifth Plenary Session of the 19th CPC Central Committee, China's premier political decision body, proposed to promote infrastructure construction in a coordinated manner, build national strength in transportation and accelerate digital development with more than 30 experimentation units.
From intelligent transportation to smart transportation: city governance empowered by technology
China's smart transportation development started late but caught up at a high speed. To understand how smart transportation has evolved into the current form, one needs a brief history lesson on the evolving digitization trend in the transportation sector. From the original idea of intelligent transportation to smart transportation, Chinese society's understanding of the concept went from digitized infrastructure to a more dynamic interaction between the governance system and the passengers. The general development could be divided into three phases:
Phase 1 (Mid-1990s to 2007): digitization trend promoted the idea of intelligent transportation
During mid-1990s, the idea of Intelligent Transportation System (ITS) emerged in China. China's participation in the 1st ITS World Conference in Paris in 1994 brought up the idea of digitalized public infrastructure. With the signal control system established in 1980s and the rapid development of national highway construction in 1990s, ITS technology was first piloted in highways with the three major highway systems: traffic monitoring, communication and toll collection. Major innovations included traffic guidance system and ETC (Electronic Toll Collection) charging system. The solutions typically were stand-alone. Entering the 2000s, the system underwent integration from multiple platforms into one but still could only achieve one-to-many instead of many-to-many relationship of the digital devices.
At the national level, the national standard of ETC series was launched in 2007 based on the experimentation project in Guangdong Province. During the Beijing Olympic Games, the government launched the special project implementing national standard for domestically produced ETC.
China's experimentation with smart city started with the intelligent ETC system (Source: Internet)
Phase 2 (2008 to 2011): rapid introduction of smart transportation movement brought real-time transportation governance into the light
IBM's "smarter city" strategy release in March 2010 (Source: Internet)
IBM took the lead in introducing the idea of smart city at the end of 2008 in China with a number of seminars hosted within the Chinese market. Smart transportation, as a major pillar of smart city, was embraced warmly as a Western advanced governance style in the post-Olympic era. The concept of data analysis was introduced to the transportation governance system of the local government. The consultancy soon reached strategic cooperation’s with many cities in China, including Shenyang and Nanjing. The most classic example of the contract with Shenyang government included the intelligent monitoring of traffic lights to reduce congestion. The major difference - as the name evolved from "intelligent" to "smart" - was the real-time decision and response system set up to dynamically influence governance.
Phase 3 (2012 - 2016): the central-government-created general guidance on the smart transportation development
The attention from central government started in 2012, but it took years to translate concepts into actual implementations on the city level. The Ministry of Housing and Urban-Rural Development created the leading group on smart city development. The goal further materialized when the Minister of Transport, Mr. Yang Chuantang, proposed the concept of building "integrated, smart, green, and safe transportation" in 2013. The policy framework to address smart transportation was not in place until 2018. Therefore, there was a large vacuum period where smart transportation solutions were developed with few guiding principles. Users, however, directly witnessed the efficiency brought by new solutions and were eager to participate, even as data privacy protection was in its infancy.
Phase 4 (2016 - Present): massive deployment of smart transportation with a focus on customizable user experience further expanded the market
Smart transportation-related patent application in China from 2015 to 2019 (Source: Internet)
Even since Mr. Yang Chuantang's words in 2013, written policies began to be drafted to promote the top-down smart transportation development. In 2016's "13th Five-Year Plan" the integration of smart transportation was formally introduced to the whole value chain of the transportation ecosystem, from construction to operation, and to regulation, setting the tone for further guidance on smart transportation agenda.
The concrete policy focus came in February 2018. The Ministry of Transport promulgated the Notice on Accelerating the New Generation of National Traffic Control Network and Smart Highway Pilot, which proposed six key directions: infrastructure digitization, road transport integration vehicle-road collaboration, Beidou high-precision positioning integrated application, integrated management of road network based on big data, and "Internet" road network integration, and new national traffic control networks. Therefore, pilot projects were introduced in Beijing, Hebei, Jilin, Jiangsu, Zhejiang, Fujian, Jiangxi, Henan and Guangdong provinces.
In September 2019, the Central Committee and the State Council issued the Outline for the Construction of Nation with Strong Transportation.The outline used a section to propose the vigorous development of intelligent transportation. In particular, it promoted the deep integration of new technologies such as big data, the Internet, artificial intelligence, blockchain, supercomputing and other new technologies with the transportation industry, while requiring the strengthening of research and development of intelligent networked vehicles (smart cars, automated driving, vehicle-road collaboration) to form an independent and controllable complete industrial chain.
In August 2020, the Ministry of Transport issued the Guideline on Promoting the Construction of New Infrastructure in the Transport Sector issued by the Ministry of Transport, listing a number of new infrastructure application scenarios in the transport sector, such as 5G, autonomous driving, and BeiDou navigation applications. The evaluation standards include convenience, cost efficiency, sustainability, intelligence, and reliability. The basic guideline includes three parts: information infrastructure, smart transportation infrastructure, and innovation infrastructure. Information infrastructure includes technology such as 5G, Beidu system, internet security, data centers, and artificial intelligence. Smart transportation infrastructure consists of transportation systems such as roads, railways, waterways, flights, postal services, as well as terminals. Last but not the least, innovation infrastructure development focuses on the R&D capabilities from private sectors, education institutions, and other research agencies.
The state government's guidance has successfully stirred the interest from the academia and private sectors. There has been a significant increase in patent applications starting from 2016.
All opinions expressed in this essay represent our personal views only.