CHINA’S government will test domestic versions of the chips embedded in passports and identity cards with an eye toward replacing the ones currently bought from foreign companies.

    The Ministry of Public Security is looking for a province to test radio-frequency identification (RFID) chips developed as part of a national push to reduce reliance on foreign technology in sensitive areas, said Gao Yuan, a researcher with the ministry’s First Research Institute. China’s plan threatens to erode the market dominance of companies such as NXP Semiconductors NV and Infineon Technologies AG.

    “The localization of the chips is to protect the safety of our citizens and to break up a situation where only foreign companies control the technology,” Gao said in a June 4 interview at a cybersecurity conference in Beijing.

    The program illustrates the scope of China’s campaign to promote local suppliers of “safe and controllable” technology. Chinese authorities want to stop using devices, software and components produced by overseas companies to close perceived back doors for cyberspies by the end of the decade.

    The ministry also equipped more than 4,000 Chinese law-enforcement officers with ZTE Corp. smartphones using a secure operating system developed by Alibaba Group Holding Ltd.

    The RFID chips found in passports, credit cards and driver’s licenses store numbers or biometric data that can be scanned to confirm identities or verify purchases.

    RFID doesn’t require the document to touch or scan a document, so identity thefts and forgeries can be carried out by hackers getting close enough to the chip to “eavesdrop.” Measures to protect against eavesdropping of chips used in passports are optional, according to the International Civil Aviation Organization.

    China issues about 40 million RFID passes annually and spends about 10 yuan (US$1.64) on each chip, Gao said. If successful, the trial may be expanded nationwide and used in the ID cards Chinese citizens present to immigration officials when traveling to Hong Kong, Macao and Taiwan, she said.

    The ministry plans to get local companies to produce the homegrown chips, Gao said. That could benefit Shanghai Fudan Microelectronics Co., a maker of chips used in credit cards and public transportation cards, and China Electronics Corp., which has a unit that makes RFID chips using China’s national encryption standards.

    (SD-Agencies)