A new report produced by Abacus, 500 Startups and the South China Morning Post highlights efforts by local authorities and companies around China to accelerate the development and application of blockchain technologies.
The 2018 China Internet Report points to government policies as playing a pivotal role in the development of emerging tech sectors such as blockchain, as well as the ubiquitous presence of the big three internet giants of Alibaba, Baidu and Tencent.
The report was released at the RISE tech conference in Hong Kong on Tuesday, and covers 12 key sectors including artificial intelligence, blockchain, e-commerce and fintech.
Local governments around China have launched policies to spur the development of blockchain technology, including Hangzhou, Henan, Guangzhou, Guiyang, Shanghai, Shanxi and Shenzhen.
According to the report both Hangzhou and Shenzhen have both launched dedicated investment vehicles for the sector, with Hangzhou officials claiming that their 10 billion yuan (approx. USD$1.6 billion) blockchain fund is the largest of its kind in the world.
The Xiong’an New Area in Hebei province will employ blockchain technology as part of efforts to create a “smart city,” while at the other end of China in Hong Kong the Global Trade Connectivity Network (GTCN) is using blockchain technology to support cross-border trade and trade finance infrastructure.
China’s private sector has shown equal enthusiasm for blockchain technology, with Alibaba teaming up with Changzhou municipality in August of last year to launch the country’s first blockchain application for the medical sector.
In March of this year Tencent entered a strategic partnership with the China Federation of Logistics and Purchasing for the development of an industry application that makes use of Tencent’s blockchain-TrustSQL.
The system will encompass platforms for e-waybill services, transportation management and warehouse management.
The report points to Bitmain as the best-funded blockchain start-up in China, having raised USD$450 million as of June 2018.
Hyperchain comes in second place with $230 million in funding, followed by Canaan ($47 million).
Leading Chinese investors in blockchain technology include Fenbushi Capital, which has taken stakes in Abra, Circle, Factom, TenX and Zcash; INBlockchain, which has invested in Qtum and Wanchain, and Qianfang Capital, a backer of IOTA, Tezos and Vechain.
China’s wild enthusiasm for blockchain technology arrives in the wake of a crackdown on cryptocurrencies launched by the Chinese central bank in September 2017, which saw initial coin offerings (ICO’s) and other forms of cryptocurrency financing prohibited completely, followed by the closure of online trading platforms and a ban on financial institutions supporting any cryptocurrency-related activities.
As a consequence bitcoin transactions involving the renminbi have dropped to under 1% of global trading activity from over 90% previously.