It has already developed integrated-circuit (IC) cards for public transport and social security.

In June 2001, the State Council approved the use of IC technology to produce an upgraded version of the country's current paper ID cards.

The Shanghai Public Security Bureau's identity-card issuing center said Shanghai will be a pilot city for the issue of the second generation of residents' identity cards. The IC cards will contain legally authorized detailed digital personal information.

The Ministry of Public Security will decide on the timetable for the issue of the new ID card in Shanghai but has not yet done so, said an official at the Shanghai center who refused to be named.

The Shanghai Huahong (Group) Co Ltd, which is the main developer of the city's public transport IC card, last month submitted a chip design for the new identity card to the Ministry of Public Security for evaluation, according to company sources.

Lou Jun, a senior marketing manager with the company, told China Daily that Huahong was the first chip-design company to submit a design.

If the design is approved, the company can be expected to design and produce electronic ID cards for residents in East China, according to Lou.

Industry sources said that another three or four domestic chip-design companies are also in the competition. The central government will choose one or two designs to conduct regional tests first.

Shanghai already uses an advanced IC card in its traffic and social security systems.

The city's current social-security card system began in 1998. The integrated-circuit card that is used contains a cardholder's personal information, including data on medical insurance, social security and public housing funds received and employment.

Shanghai is one of six pilot cities and regions testing such a social-security database system.

More than 90 percent of local employers have been given the social-security cards, according to the Shanghai Social-Security Card Service Center.

Shanghai's public-transport IC cards were introduced at the end of 1999 and give cardholders access to different types of public transport in the city using a single payment system.

More than 4 million transport cards have been issued and the payment system covers neighboring cities such as Suzhou and Wuxi in East China's Jiangsu Province.

Shanghai is now a major chip industry base in China, producing more than 60 percent of the country's semiconductors, according to local media reports.

(China Daily February 24, 2003)