China is at the forefront of the global blockchain revolution.

As significant government backing for technology and industrial innovation promotes the sector’s development, wealth and talent come in.

China is optimistic about the burgeoning blockchain industry, seeing it as the next frontier for national competitiveness and a digital future.

China, as one of the first big countries to see the promise of blockchain technology, is stepping up efforts to gain worldwide domination over blockchain, the underlying technology that powers digital currencies like bitcoin and a variety of other uses.

President Xi Jinping emphasised the importance of blockchain technology in the new round of technical innovation and industrial transformation in October, demanding more efforts to promote the development of blockchain technology and industrial innovation.

Xi’s speech sparked a flurry of activity, and the country is now experiencing a blockchain boom.

Experts and entrepreneurs believe the government’s strong backing for blockchain technology would help the sector grow in the future, but they cautioned that the notion should not be hyped.

Blockchain provides an open and decentralised record of every transaction involving money, products, and property, among other things, by combining the use of distributed data storage, encryption techniques, and other modern technology. It creates a record whose legitimacy can be checked by the entire community, providing a high level of security.

Wei Kai, deputy director of the China Academy of Information and Communication Technology’s Cloud Computing and Big Data Research Institute, believes that as money and expertise stream into the blockchain industry, the technology will be used to a wide range of real-world scenarios.

“The Chinese government’s strong backing will help to standardise and develop blockchain technology. The financial industry and the real economy would benefit from the development of blockchain since it will help enhance efficiency, lower operational costs, and create a more efficient credit system “Wei made the remarks at the recently concluded Trusted Blockchain Summit 2019 in Beijing.

Blockchain technology, according to Wei, will be a new frontier of innovation in a variety of industries, including cross-border payments, global trade, logistics, supply chain, banking, government affairs, intellectual property protection, food traceability, and invoicing.

According to a recent report published by the China Academy of Information and Communication Technology, China is at the forefront of global blockchain development, with the country racing ahead in terms of blockchain patent filings.

There were more than 18,000 blockchain patent applications worldwide as of July 25, 2019, with China accounting for more than half of the total. Alibaba and China Unicom took first and fifth place, respectively, among the top 20 global corporate applications.

As of August 2019, 2,450 blockchain companies have been established globally, primarily in the domains of cryptocurrencies and blockchain technology research and development, according to the report.
In terms of the number of blockchain companies, the United States led all other countries, followed by China and the United Kingdom.

The blockchain revolution is sweeping the country. According to the research, more than 30 provinces, municipalities, and autonomous regions, including Beijing and Shanghai, as well as Guangdong, Jiangsu, and Guizhou provinces, had issued directions to develop blockchain technology as of May 2019.

“The key reasons for the birth of this new technology were to tackle the problem of trust between various agents, minimise communication costs, and increase collaboration efficiency,” stated Wei of the CAICT.

Wei, on the other hand, pointed out that blockchain technology is still in its infancy.

“We still have issues like a lack of oversight, immature technologies, and a gap between demand and availability for blockchain skills,” Wei continued. “We must remain logical and not hype the blockchain notion as we go toward a blockchain future. Not every case necessitates the use of blockchain, and we must find the proper path.”

According to a recent report by global research firm IDC, China’s blockchain spending is expected to expand rapidly in the next years.

According to the analysis, China would account for roughly 68 percent of all blockchain spending in the Asia-Pacific area between 2018 and 2023. During that time, the country will grow at a compound annual rate of 65.7 percent, while the Asia-Pacific area would increase at 50.3 percent.

The adoption rate of blockchain technology has been steadily increasing, according to Jeff Xie, senior industry analyst at IDC Asia-Pacific.

At a recent exhibition in Fuzhou, Fujian province, employees of a water service provider used a blockchain management system to assess the quality of drinking water. [Photo/Xinhua]

“Blockchain use cases are maturing as well,” Xie added in the research, “filtering out the overhyped or solutions overselling the technology from implementations where blockchain delivers value to ecosystems.”

“Because the technology is here to stay, businesses must evaluate the merits of blockchain, just as they do with other emerging technologies, and identify feasible areas of application where the technology may save money and boost efficiency. Leveraging blockchain adoption can help firms improve their digital transformation journey with proper analysis “Xie went on to say.

Many tech businesses are gearing up to build blockchain-related business, and many have already achieved significant headway, seeing the huge potential of the blockchain sector.

The Chinese internet behemoth Tencent collaborated closely with the tax department in Shenzhen, Guangdong province, to provide blockchain-based invoicing to the city. In August 2018, a local eatery in Shenzhen received the first blockchain-based invoice.

In Shenzhen, the blockchain-based invoice system has quickly expanded to include financial insurance, wholesale, retail, hotels, catering, property management, parking, transit, and internet services.

Shenzhen had issued more than 14.2 million blockchain-based invoices totaling 9 billion yuan ($1.3 billion) as of December 24, 2019.

Tencent’s general manager of blockchain technology, Li Maocai, said Xi’s statements underscored the critical importance of blockchain technologies in future development.

“Cryptocurrency is simply one of many blockchain uses,” Li explained. “With the government’s strong support, blockchain companies, specialists, and institutes will increase their push for breakthroughs in the underlying technologies and overcoming current technological hurdles, giving the entire industry a boost.”

More work is needed, he says, to connect blockchain with cloud computing, big data, the internet of things, and other new technologies to solve real-world problems, and Tencent will continue to look into blockchain gaming, supply chain finance, blockchain-based invoicing, and other areas.

Xunlei, a Chinese blockchain behemoth, is likewise putting forth serious effort to stake a claim in the fast growing blockchain industry.

Xunlei has applied for over 100 blockchain patents thus far, mostly in the key underlying technology.

Environmental protection, telecommunications, traceability, biotechnology, live services, digital media, information services, advertising, public welfare, catering, insurance, and copyright were among the industries covered by the company as of October 2019.

The Copyright Protection Center of China, digital marketing service provider Hylink, and Thailand’s Naresuan University Hospital were among Xunlei’s collaborators, according to the company.

According to Lai Xin, chief engineer of Xunlei’s ThuderChain blockchain platform, a wide spectrum of blockchain initiatives will emerge in 2020 due to the government’s strong commitment to blockchain.

“In the long run, the objective is to focus on blockchain technology application,” Lai said. “Currently, the challenge is a lack of willingness on the part of some businesses and organisations to use blockchain, as well as a talent scarcity. More efforts are required to cultivate big-picture thinkers and cryptography professionals.”