"Our program puts more emphasis on promoting ‘human-centric' urbanization and pushing the evolution of city governments' roles."

Analysts said the smart city program will be a major boost for software, integrated circuit and e-commerce companies. Related services also are expected to pull up the whole service industry and overall economy.

China has set a target to boost public and household spending on the IT industry by more than 20 percent annually through 2015 and foster a 3.2 trillion yuan industry by then, according to a State Council meeting in July.

The council, which is China's cabinet, designated the information sector as the new driver for the country's economic growth. Documents issued this year specifically encouraged more organizations to get involved in smart city development.

Lacy has observed a "huge amount of interest.

"But I would say from my experience of traveling around China, talking to mayors and city officials, that the strategy (of building smart cities) is much more ambitious and the vision is much larger than the execution and the action really taking place."

So the real challenge, instead of money, is the "big gap between rhetoric and reality", he said.

But with money and government commitment, chances are good for companies to be involved in some monumental projects.

Thomas declined to reveal the scope of the company's smart business in China, but he said the business potential is probably the largest in the world.

"China has about 90 cities with more than 1 million people. We are going to have more than 200 cities with more than 1 million people in 2030."

Lacy added that it is easier for developed economies to implement projects, but they tend to be smaller.

So the opportunity is really in China, "not just domestically but internationally", he said. Just as the United States defined the last era of urbanization, China has the opportunity to leap ahead, redefining urbanization for a new era.

However, as with every aspect of development in China, industry experts fear that with so many cities and companies involved, the smart city market may become chaotic, and standards will be hard to reinforce.

For example, different authorities have chosen different cities in which to run smart city pilot programs and related projects. Each city also has its own priorities.

Challenges ahead

Tong Tengfei, deputy director of Beijing's commission of economy and information technology, said his department has been leading the smart city programs in population monitoring, traffic control, environmental protection and public security in the capital city.

All of Beijing's taxis and about 65 percent of the city's buses are equipped with global positioning systems to help the municipal administrators monitor and direct real-time traffic flow.

But can the same solution be used in other cities — or among many cities?

Xiong Gaizhi, secretary-general of the China Smart Cities Industry Alliance, said there's a lack of standards and benchmarks for project evaluation.

"There is a rush in which so many cities jump on the ‘smart city' bandwagon," Xiong said.

"But it is difficult to judge whether the projects they have taken up are really sophisticated enough to do the job and live up to the name of smart city solutions."

Yin Zheng, senior vice-president of Schneider Electric in China, said that project planning also is a serious challenge.

"Smart city solutions are not as simple as having some IT. They are solutions that integrate many economic and social factors to ensure sustainable growth for cities and improve the living standards of urban residents," Yin said.

IT companies need to think about the best way to work with governments and investors and how to set an appropriate price for the industry and for customers.

Li Tie, the head of the China Center for Urban Development, said the smart city programs should make better use of resources and increase the convenience of daily life.

He noted that while the country's cities have surged ahead in their development, urban life has actually become more difficult.

"Rome wasn't built in a day, but often, our cities look as though they've changed overnight. How can you expect them to be ‘sustainable' given such a rapid pace?" Li asked.