The Chinese Surveillance State

StephenW

[An investment commentator talking about China  Security & Surveillance Technology (CSR)]

The Chinese Surveillance State
    China has taken surveillance,  which they call homeland security technology, to new, invasive heights with a  national network of surveillance cameras, biometric identification cards, and  facial recognition software.
    Train stations, airports, busy  streets, universities, religious sites, banks, factories, libraries, border  crossings, parks, athletic fields, government buildings, schools, and popular  gathering spots are monitored.
    Get this — every internet cafe  in China has surveillance cameras that are hooked up to local police stations  so they can keep an eye on not just WHO is using the internet but WHAT sites  they are visiting and what they are posting. Facial-recognition software makes  it possible to photograph, record, and identify users no matter where they go.
   

400 million cameras ... and  counting! Chinese  police have installed 3 million surveillance cameras in China and incorporated  face recognition technology into them. Check out this YouTube video clip: http://www.youtube.com/watch?v=jmI1rBTRExo

It is the LAW that every  internet café must install these surveillance cameras.
    Chinese officials boast that  all this surveillance helps battle crime and terrorism. In Guangdong province,  the government claims that the new cameras deterred more than 18,000 street  crimes. In the south-central town of Kunming, crime fell by 10% after the  police installed new cameras.
    All that surveillance is  enriching somebody and that somebody is China  Security & Surveillance Technology (CSR). CSR sells automated  surveillance systems and has installed them all over China.
    The company is involved in all  phases of surveillance food chain: The manufacturing, distributing, installing,  and servicing of surveillance systems.
    More than half of CSR's customers  are governmental entities, such as customs agencies, courts, public security  bureaus, prisons, schools, museums, sports arenas, libraries, airports, and  railroads. Even during economic downturns, CSR should continue to mint money  from its government contracts.
As  important as the government is to CSR, commercial security sales still  constitutes close to half of its revenues. That is important because the  industrial/commercial market could be larger with more recurring revenues than  the government market.
    CSR  is the largest indigenous security systems integrator in China, the largest  manufacturer of security products, and the largest non-government monitoring  company in China. No other security company in China offers one-stop shopping  for manufacturing, distribution, installation, and monitoring.
    Surveillance  and security is a booming business all over the world, but perhaps no place  more than in China.
    IMS  Research, a research company that follows the surveillance industry, reported  in its The China Market for CCTV and Video Surveillance Equipment — 2010  Edition that it expected the Chinese market to grow by more than 20% in  2010.
    The  total Chinese video surveillance market was $1.4 billion in 2009 and is  expected to grow at a compound annual growth rate of 20% for the next four  years and hit $3.5 billion in 2014.
    What  the Chinese government wants ... the Chinese government gets. And what it  desperately wants is to keep tabs on its 1.3 billion citizens. That represents  a ton of business and why 55% of CSR's business comes from government orders.
        

Behavior-Recognition  Software ... You’ve  probably heard of face-recognition software. How about behavior-recognition  software? Behavior-recognition software is designed to spot the beginnings of a  street protest, riots, or violence. For  example, the newest generation of security cameras armed with surveillance  software can count the number of people in crosswalks and alert the police if a  larger-than-usual crowd forms at an unusual hour, a possible sign of an  unsanctioned protest. Remember,  China is not a democracy and its people do not have the freedoms that we  Americans consider a birthright.

    The current 11th Five Year Plan  states that a secured and stable society is the number one priority for the  central government. That is why the Chinese government has passed several laws  which require surveillance.
   

• The Safe City Safety  Surveillance Ordinances REQUIRES the 660 largest cities in China to install  surveillance systems in major public venues such as subways and municipal  buildings.
• State Ordinance 458 requires  all entertainment venues in China — internet cafes, pubs, discos, and karaoke  parlors — install electronic surveillance systems. This is a law; not a  guideline.
• The 3111 project is a security  project test program for monitoring and reporting on the provincial, city,  county and municipal levels.
  

    The  Chinese government has the power, motivation, and the money to become a Big  Brother state, and that is exactly what it is doing. China Security & Surveillance  Technology is the company best positioned to profit from that.