Posted 2 years ago | by Ben Armstrong
China is Pushing Blockchain Development – but Projects Are Unlikely to Be Viable Internationally
China has defined itself by the ability to create new technology quickly – and adopt (sometimes steal) ideas from other nations to serve its economic interests. The Middle Kingdom is once again plugging a new technology into its business model – and this time its blockchain.
Blockchain development in China is picking up speed, whether its blockchain integration by federal agencies or mainland investors hastily adopting DeFi (which may be totally illegal).
China Makes Blockchain a Competitive Domestic Space
Blockchain development in China seems to resemble a race after the central government launched 'City blockchain innovation rankings'. What China is calling 'objective data' of each city will be collected and tallied with Beijing currently in the lead with 99.82 points and Shenzhen following in second place.
We see cities rushing to adopt and implement blockchain, like the city of Hainan recently striking a deal with Vechain to build a blockchain-powered governance system for Wenchang, an area in Hainan which raises awareness for aerospace travel.
Furthermore, Kingsoft Cloud also takes part in developing a “smart city brain” through the culmination of big data, AI, and blockchain technology.
In action, Fujian province also launched 20 new blockchain projects to push for economic recovery by kickstarting government operations in different sectors such as industrial, agricultural, public service, and so on.
The Blowback is Starting
We may assume the giant push by the Chinese government were for the sake of fast-tracking economic recovery – as there is still no sign of the digital yuan will be released from its trial anytime soon.
Last month, the People's Bank of China announced the delay of its central bank digital currency (CBDC), highlighting that the economy is not yet ready due to post-covid instability.
As of now, no new development regarding it has been made, confirming that China is still in recovery and these hasty blockchain developments might be an onramp being prepared for the digital yuan.
At the same time – Chinese foreign policy issues are coming to the forefront on the global stage. China is engaged in active military operations against at least three nations, with nuclear armed nations comprising two of those three.
Chinese troops are being moved into the LOC on the Indian border – and as always – China refuses to back down along its Eastern sea border. The USA is maintaining a large naval force – and has also moved B2 nuclear capable bombers into the theater.
China's Export Model Will Likely Come up Short
China was able to become the manufacturing powerhouse of the world in a time when it had stable relationships with its neighbors – and the US was buying its goods in large amounts.
The geopolitical world order has shifted rapidly – and Chinese products are no longer welcome abroad. The USA and India are also banning Chinese apps – which makes blockchain a pretty poor export sector for China.
While the Chinese government will likely continue to push blockchain development in its domestic market – the products that are developed aren't going to be allowed to leave China. Sadly, China is turning into a global pariah – and isn't going to be the same nation it was a few years ago ever again.
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