China's first Internet of Things (IOT) industry fund, with a planned size of 5 billion yuan (US$73 million), was set up in Wuxi, Jiangsu Province on Tuesday, chinanews.com.cn reported.

The fund was initiated by Wuxi New District Venture Investment Group, Datang Telecom Technology Co, the Chinese Academy of Sciences (CAS), and Wuxi Guolian Development (Group) Co. Its target is investment opportunities in the IOT and sensors industries. They pledged to put 1 billion yuan into the fund in the initial stage.

IOT technology is based on the concept that all real-world objects can be identified and managed by computers if they are equipped with radio tags and linked to the Internet. Technologies such as radio frequency identification and sensors form the cornerstones of the network.

The value of China's IOT market is likely to reach 180 billion yuan this year and 700 billion yuan in five years' time, the report said.

Shi Erwei, vice president of CAS, said many small and medium-sized enterprises in the sensors industry have difficulty raising much-needed funds. Like players in other emerging industries, they have to invest heavily into research and development but their business faces many uncertainties in terms of profitability.

A Wuxi official said that emerging industries such as the IOT industry have to turn to the financial market apart from seeking government investments.

Wuxi's venture investment funds have reached 7.2 billion yuan, according to the official.

(chinadaily.com.cn May 20, 2010)