Called "electronic tags" in China, these small transmitters--essentially high-tech bar codes that can be scanned from a distance and even through the walls of boxes--are seen by many as the key to a far more efficient supply chain than is achievable today.
There is no single standard for RFID. The SAC said that it will try to draft its standard so that it will be compatible with similar technologies.
RFID companies are likely to closely monitor how the standardization process moves forward. Recently, the Chinese government demanded that the Wi-Fi chips sold in the country contain an encryption standard controlled by 11 local companies. To sell Wi-Fi parts in the large and rapidly growing market in China, foreign companies necessarily have to partner with Chinese companies or license the technology from them.
With manufacturers and distributors scrambling to meet those retail and military mandates, research firm IDC said it expects RFID spending for the U.S. retail supply chain to grow from $91.5 million last year to nearly $1.3 billion in 2008.
Privacy advocates, however, assert that the radio-tag technology could allow companies to track individuals. Although many in the industry have said this is more difficult than it sounds (RFID tags can be disabled by a trip through a microwave), some companies have backed away from trials.
Another controversy with RFID is finding companies to make the tags. Intel, IBM and others are very interested in the technology, but because it will allow them to sell more servers and software for managing networks of tags. The RFID tags themselves will only sell for a few cents when volume production begins.
ZDNet China is based in Beijing. CNET News.com's Michael Kanellos contributed to this story.