The Chinese are going to get you!

That's according to Peter Harrop, the chairman of IDTechEx.

While you weren't looking, China jumped to the number one spot for RFID volumes. And it's all being driven by the government of China.

Harrop made the remarks at last week's Smart Label conference, as reported by Card Technology:

China has become the largest market for radio frequency identification technology, or RFID, driven largely by its mass issuance of a contactless smart card as a new identification document, Peter Harrop, chairman of UK-based consulting firm IDTechEx, said today at the opening of his company's RFID Smart Labels USA conference in Boston.

RFID includes all kinds of chips that communicate with readers via radio signals, from tags used to identify merchandise in transit to contactless smart cards and electronic passports. Harrop says contactless smart card technology accounts for the bulk of the money spent on RFID today, because of the relatively high cost of those cards and chips. For instance, he says adding a page to a passport with an embedded smart card chip and antenna costs $3 to $4. RFID tags for animals and merchandise are well under $1. And there is intense pressure from major companies mandating that suppliers add RFID tags to their products -- notably giant retailer Wal-Mart and the U.S. Defense Department -- to bring down the cost of those tags so that more products can be tracked via radio frequency readers.

What's happening is that China has created its own market internally for RFID. Two Chinese vendors of smart cards have made the list of top vendors this year. Any Western vendors who have been thinking of tapping the vast potential of China now have to face the internal competition.

Harrop adds in the Card Technology article: "The Chinese are now gorging on a huge market created by the Chinese government," Harrop said. "They don't export much at all, but when they build up huge automation, they're going to get you."