China’s satellite navigation system Beidou expected to generate $298 billion services market by 2020

Beidou, China’s home-developed satellite navigation system designed to reduce its dependence on America’s Global Positioning System (GPS), is expected to generate a services market worth over 2 trillion yuan (US$298 billion) by 2020, according to an industry group representative.

“Beidou will have wide applications in areas such as logistics, precision farming, marine monitoring, comprehensive urban security and smart cities,” Zhang Quande, secretary general of China’s association of global navigation system applications and location-based services, said at a conference in Shenzhen on Sunday.

“It will enter a fast-growing period in the coming three years,” the Shenzhen Economic Daily quoted him as saying on Monday.

The expected rapid expansion comes as China challenges the dominance of the US-led GPS amid wider efforts by the world’s second largest economy to become a global leader in space and related technologies under its Made in China 2025 programme.

GPS is more accurate, to within centimetres compared to metres, than the Chinese system but Beijing’s concerns over Washington’s ability to shut off service during a potential conflict prompted China, Russia and other nations to develop their own system. Beidou, the Chinese name for the seven stars that make up the Big Dipper, is one of only four global satellite navigation systems, along with GPS, Russia’s Glonass and Europe’s Galileo.

In December, China announced the worldwide Beidou service roll out would begin ahead of schedule in 2020, after launching 19 positioning satellites in 2018 that were able to provide basic coverage. Twelve more are planned by 2020 to improve the precision of the system.

The GPS challenger currently offers a location service with an accuracy of 5 metres within the Asia-Pacific region and 10 metres in other parts of the world, Ran Chengqi, director general of the China Satellite Navigation Office, said in a briefing in December.

Zhang said the market value of Beidou applications is likely to exceed 2 trillion yuan in 2020 upon completion of its global outreach.

Similar to the origins of GPS, Beidou started in 1994 as an air defence system with the goal of boosting the country’s space programme, while freeing up the People’s Liberation Army from its reliance on the American-built system.

The Chinese navigation system not only serves China’s civil aviation and maritime needs, but is also used in global search and rescue, telecommunications and mass consumer applications for navigation.