The market is expected to grow by 33% each year, with the market hitting 7.9t this year (£908bn) alone.
According to the Chinese Government, more than 500 cities are on the path to becoming smart cities. In these urban areas, the data collected from sensors are used to make city services run more efficiently and make cities more environmentally friendly.
Last year, the Government identified four tech companies to improve AI development across China including Baidu Inc and Alibaba Group, though smart city initiatives were earmarked much earlier in China's 12th Five-Year Plan back in 2011.
"China’s smart cities market is projected to increase about 30% year-on-year in 2018, and all the provincial and sub-provincial cities have launched development and construction for smart cities, with more to follow suit," says Pierpaolo Franco, managing director for the Royal Institution of in the Greater China region on the state-owned China Daily website.