China set a three-decade low GDP growth target of 5.5% for 2022 at Saturday’s Two Sessions, the country’s most important set of political meetings, but the dim economic outlook did not dampen the delegates’ heated metaverse discussion.

The metaverse was examined at a national level at the Two Sessions for the first time. In the background, “metaverse” has become a buzzword in China over the past year, with tech titans Tencent, ByteDance, NetEase, and Baidu applying for patents related to the sector.

Kong Falong, a deputy to the National People’s Congress and a party secretary of a rural credit cooperative in the southeastern Jiangxi province, told local media that he suggested building a national research institution in the metaverse.

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Kong said that by pouring in more investment to nurture talent and support metaverse technology developments, the country could take a leading position in the new race.

As the metaverse develops, issues related to data security, information protection, and speculation may emerge, and these should be regulated appropriately, Kong said.

Zhang Ying, a member of the Chinese People’s Political Consultative Conference (CPPCC), an advisory body consisting of industry leaders and party delegates, said China’s metaverse sector focuses too much on entertainment experience upgrades and lags behind in key technology developments, state media reported on Saturday

Zhang also noted the “desperate” need for regulation, citing “serious” speculation observed in the current state of the metaverse. At least two more members of CPPCC called for metaverse regulations in separate interviews with local media outlets. 

See related article: 16,000 metaverse trademark applications filed, unlikely to pass in China

Chinese companies are sparing no effort to ride the wave. The National Intellectual Property Administration said last month it had received at least 16,000 trademark applications containing the word “metaverse.” 

But not all these projects may be metaverse-related.

In February, China’s Banking and Insurance Commission (CBIRC) issued a warning against illegal fundraising schemes disguised as fake metaverse projects, blockchain games, digital real estate, and cryptocurrencies.

“Strictly speaking, the CBIRC warning doesn’t mean it was suppressing the investment in the metaverse, but it was simply reining in on fraud and illegal fundraising surrounding ‘guarantees for high returns,’” Tony Wang, a partner of Beijing-based Tianyuan Law Firm, told Forkast. 

“The warning, coupled with local governments’ action plans, shows that the country still wants to develop the metaverse amid the ongoing wave,” he said.

Local governments are also eyeing opportunities. 

The Hongkou district government in Shanghai launched a billion yuan (US$158 million) fund for metaverse developments, People’s Daily reported.

Meanwhile, Beijing’s Tongzhou government announced measures to attract metaverse development to its district. It has pledged subsidies of up to 100% rental fees for metaverse-focused offices in the district.