Applications Banking Blockchain Business Cryptocurrency Finance Government Investment Opinions Regulation Tech

Why It’s Too Late To Compete With China In Blockchain

August 3, 2020
Ross Peili


Why It’s Too Late To Compete With China In Blockchain

Attributing for one-fifth of the planet’s population, China is undeniably an economic superpower that’s empowered to become a global blockchain leader in terms of adoption, utility, and overall innovation. 

The People’s Republic of China is not fooling around when it comes to innovation. When President Xi Jinping is assured of something is important for China’s succession as a global economic and technopolitical center in the foreseeable future, it becomes instantly important for Chinese government bodies, domestic enterprises, and even individual citizens. 

Have in mind, we’re talking about a single Asian country that attributes for near 1/5 of our current planet’s population. That’s right. 

So, why do I think it’s too late to compete with China’s urge to spearhead the blockchain revolution? The answer is quite complex and based on several factors that most of the time are unparalleled with each other, making it even harder to spot and include as an influential factor when measuring China’s overall rise to global power.

A Brief Take On China’s Metamorphosis Into A Hi-Tech Conglomerate

Without a doubt, China is one of the fastest-growing economies on the map. Take Shenzhen for example. A former village that was mainly occupied by local rice farmers, turned into the Asian alternative to Silicon Valley in less than a couple of decades.

In Shenzhen, money is the same as the numbers behind your smart hand-held device’s screen. Although China is the world’s first cashless society, and on a national scale, one could say that Shenzhen is China’s beta server, where exotic tech innovations are being developed and tested as an essential part of the norm, before spreading to the rest of mainland China.

Pit Stop: Chinese “Silicon Valley”, Shenzhen to launch its own Cryptocurrency

That is mostly due to China’s long-year experience in consumer electronics production, software engineering, and mass marketing strategies that helped most of the western titans including but not limited to Apple, Microsoft, BOSCH, and pretty much every major international-grade brand operating in the computing field, to become what they are today. 

Of course, cheap Chinese hands, and low-quality components are a thing of the past now, with the majority of local manufacturers that used to work for Apple, Nike, and HP launching their own ventures citing that producing iPhones is just “not enough”.

The Chinese not only learned to copy-paste western patents, but they improved them over time, managing to create twice as good products, for half the price. Some of them like Huawei, Xiaomi, Li-Ning, and DJI, are taking over the global scene by the hour.

Furthermore, simplified Chinese language (Mandarin, Pinyin) is a collective communication protocol instead of individualistic as happens in most western societies.

For example, we would say something like “Bob did that yesterday”, while Chinese would wrap the same ideological concept with something like “This happened yesterday when the guy who runs fast* did that”

*Similar to native American names, Chinese names represent a deeper meaning and are not self-centered and individualistic. Sure, that plays a major role in China’s governing model, analogizing they are running a modern form of communism, yet it is also the driving force behind China’s rise to power. 

In Shenzhen, every single action, whether natural, pre-designed, or humane is monitored, recorded, and evaluated by a network supported by AI, IoT, and Blockchain, in order to conceive and prevent malicious or harmful actions with minimum bias. 

For example, a trespasser in the hi-tech Metropolis, won’t be stopped by a law enforcement officer in case the later spots the violation. Instead, high-quality real-time cameras powered by facial recognition software identify the actor and notify him with the sum of the fine he has to cover for his violation, directly to his hand-held device, and all that without human interference.

Some would argue that this is a Black Mirror inspired dystopia. I’d say, Black Mirror is a documentary of the past for Shenzhen netizens, rather than a sci-fi scenario.

Another stunning, yet practical example would allow Chinese beggars to carry a QR code on their neck instead of jars and hats, in order to accept donations and philanthropy, considering paper money is something Chinese can only see in the results of a relevant web search. Too far-fetched you might think? Efficient I’d correct.

China Grabs Blockchain By Its Hand

If you consider the above as something that’s already taking place under physical circumstances, blockchain technology should come as a natural component for such complex and autonomous information flow systems. 

The Chinese are not into blockchain because of cryptos, neither they desperately seek to profit from digital currencies, having in mind, their economy is digital for over a decade now. 

Relevant Article: China Urges Its Citizens To Avoid Illegal Investment Opportunities

Blockchain architecture is basically an essential pillar for any autonomous society, and China is not keen on losing not a single minute of reaching that reality point first.

Recording, archiving, managing, and distributing data (which by-the-way is the new oil), is what distributed ledger networks do best, and on top of that in a decentralized manner.

President Xi Jinping not only was the first government leader to publically promote blockchain adoption, urging local government agencies and organizations, as well as Chinese companies to integrate the new technology asap, but he is one of these guys who are more into Artificial General Intelligence, Machine Economies, Automated Public Administration and you can confirm that by taking a look at his library, listen, or read his interviews and experience the overall growth of Chinese hi-tech products and services even as overseas consumers. 

On the other hand, western leaders, including Trump and Johnson are subjects of adult entertainment magazines, and the only reason they are into hi-tech, and blockchain more specifically, would be the pressure they get from their advisory board and domestic enterprises in order to avoid being left in the dust by China’s or any other country’s speeding on the matter.

It’s one thing when a country’s leader comprehends what blockchain is really capable of, and a totally alien thing when a country’s leader is not even interested in learning blockchain, considering it too vague and complex to understand, too risky to invest, and too early to start digging it with high-priority.

Thankfully, there’s more room for China. 

Recent Blockchain Developments In China In Machine-Gun Speed

The Blockchain Service Network (BSN) is China’s first state-backed DLT where any local or international company is welcome to build and deploy dapps, smart-contracts, and DeFi tools executed on-chain. 

Domestic payments processing giants of the likes of AliPay, WeChat, and UnionPay are in accordance with the government’s vision and are not only experimenting with blockchain technology, but most of them are already utilizing it in their internal services, apps, and products.

Read More: AliPay, Tencent, and Union Pay among the first to receive China’s gov-backed cryptocurrency

Beijing is working on a municipal governance system based on blockchain, where literally every single gov-affiliated organization, legal entity, and SMEs are called to implement DLTs using a framework provided directly by the government as guidance.

During the annual World Artificial Intelligence Conference (WAIC) that takes place in Shanghai and has speakers of the level of Elon Musk and Jack Ma, blockchain technology is a native topic and it is being considered as the backbone for truly autonomous AI systems. 

Wang Jianwei, deputy director of the Information Technology Division at the Ministry of Industry and Information Technology said that most economic centers in China, including the capital Beijing, Shanghai, and Shenzhen are already working on local and national blockchain projects, while some of them are already empowering every-day life activities and procedures by utilizing some sort of a DLT.

For example, the Shanghai High Court has recently tested recording, registering, and accessing court data on blockchain successfully, meaning not only the Shanghai High Court will adopt this method to use in future courts, but over 250 Chinese courts are intrigued by the method and shall follow suit accordingly

Last but not least, Chinese hi-tech companies such as, Tencent, and Alibaba account for near five thousand (5,000) patents filings/year subjecting the term “blockchain” within their respective citations.

Related Article: A Brief History Of Tencent Holdings And Its Rise To The Blockchain Era

Why China Leaves No Space For Competition

Truth is, China is already a global blockchain leader, although since we’re at the early stage of DLT advancement, one could say other countries could follow up if not surpass the Asian titan. 

Unfortunately, that’s not the case with Western countries, where blockchain is still directly associated with Bitcoin and other volatile digital assets, while the real networking benefits a DLT offers is totally absent in regulators’ minds.

Most regulators, gov-leaders, and financial institutions in Europe and the U.S. are unsure about how they should approach blockchain technology, and in addition, they are unable to point out the vast amount of benefits DLTs offer to future societies, where everything tends to be digital and automated. 

That’s not just lack of comprehension, but lack of incentive, and most importantly lack of will to elevate to the next level. The EU is run by old folks nobody knows their names, and their current social status, regardless of its deadline, is not helping them, and by extension domestic regulators, in seeing further what they’ve already achieved. 

Read More: What Lawmakers Make Of The Term ‘Blockchain’ In 2020?

For that reason, I don’t believe any country could beat China in blockchain advancement and development, and again, not because they are unable to, but simply because it is not a top priority for the time being. 

We have priorities like green energy and data privacy. Something completely irrelevant and outdated, considering our data has been sucked for over five decades straight. It is idiotic at best to pretend we care about data privacy in 2020 or assume that data privacy is more important than what’s yet to come in the next five decades. 

The Chinese don’t pretend they have data privacy. They don’t. The gov knows it, the companies who suck the data know it, and people know it. Therefore they focus on what they can do with that data instead of subjecting the concept of data privacy as an important aspect, especially when we’re far ahead from the point where we could still take another path, one less tech-oriented.

Would you disagree? Feel free to leave a comment in the relevant section below, or hit me on Twitter. Which country you suggest is most likely to attempt overthrowing China as the global blockchain leader in the next decade?