China is expected to introduce policies in August that will give preferential treatment to the geoinformation industry, which is predicted to produce 1 trillion yuan ($157 billion) worth of goods and services by 2020, said an industry source.

The policies, which are likely to be issued by the State Council this month, will call for the use of tax cuts and other measures to support the industry, according to Cao Hongjie, vice-president of Beijing UniStrong Science & Technology Co Ltd, a Chinese maker of navigation products.

The polices are aimed at making the geoinformation industry - which offers a range of products and services related to surveying, mapping and navigation - one of China's strategic emerging industries, Wang Chunfeng, deputy director-general of the National Administration of Surveying, Mapping and Geoinformation, said last month.

"Apart from the preferential policies, the government will also be increasingly open with its geographical data, which is important to the development of the industry," Cao said, citing talks he has had with administration officials.

China, the second-largest economy in the world, has been working harder to transform its mode of economic growth.

To that end, it is paying particular attention to seven industries that rely more on the use of knowledge and technology than on labor and resources - energy-saving and environmental protection, information technology, biology, advanced-equipment manufacturing, new energy, new materials and new-energy vehicles.

The country's geoinformation industry reported that it produced 150 billion yuan worth of goods and services last year, an amount up 50 percent year-on-year, according to the National Administration of Surveying, Mapping and Geoinformation.

Even so, it didn't come into existence in China until the 1990s and is still much smaller than many other industries in the country. The software industry, which is also receiving government support, had 1.8 trillion yuan in output in 2011.

Chinese companies in the geoinformation industry are small and find it difficult to compete in global markets, wrote Xu Yongqing, deputy director of Development and Research Center of the administration, in an earlier report.

They also do not offer a variety of products and are relatively ineffective marketers, Xu said.

Even so, companies in the industry now have a variety of opportunities they can take advantage of, such as China's adoption of the navigation satellite system Beidou.

"The navigation market stemming from the Beidou system will grow quickly and is expected to offer 100 billion yuan worth of opportunities," said Han Xingnan, an analyst with Guolian Securities, in a research note.

The industries that are expected to undergo the quickest expansions are the national defense, transport, surveying, telecommunications and electrical power industries, he added.

China plans to have more than 30 satellites that use the Beidou system by 2020, up from the current 13, enabling it to provide more accurate data and services.

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