The Chinese government has identified blockchain technology development as an issue of national importance, along with other emerging technologies such as AI, deep learning and IoT. President Xi Jinping has outlined the importance of blockchain technology to China’s industrial maturity, urging continued development so China can lead the way in defining international standards.
Beijing sees blockchain as a tool for disintermediation and finding efficiencies in industries with outdated, archaic processes. In contrast with the libertarian attitude on blockchain and cryptocurrency that is popular in the West, firms in China are seen as stakeholders in the economy with generally good relations with the state; the Cyberspace Administration of China (CAC) issues regulations for the sector, and firms tend to be compliant. The public and private sector alike enthusiastically embrace the concept of “Blockchain with Chinese Characteristics.”
See related article: President Xi Jinping Endorses Developing Blockchain Technology in China
Foreign companies are not excluded from participating in the sector: IBM is a major player in China’s blockchain market. The US computer hardware company is collaborating with the Bank of China on blockchain research, with Walmart and JD.com on supply chain tracking for food safety, and with Sichuan Hejia on chemical supply chain tracking for pharmaceuticals. But if there is low participation from foreign companies, do they even have an advantage in China given local capabilities?
Unlike the U.S., whose only national blockchain policy pertains to tokens being viewed as securities, China’s comprehensive blockchain strategy involves both the public and private sectors. The second chapter of this report addresses the latter.
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This article is part of Forkast.Insights’ China Blockchain Report.