China Wants Blockchain Technology Development Accelerated

The State Council of China has asked local authorities to speed up the process of developing blockchain technologies. The order, which was initially issued earlier in the month, was addressed to municipal and provincial governments which were asked to specifically accelerate financial technologies including expediting blockchain applications while being guided by the regulatory frameworks that currently exist.

In so doing the Chinese government hopes to continue the reforms that are being undertaken at the Guangdong Pilot Free-Trade Zone, a specially designated area in the Guangdong province of China aiming to integrate economically with Macau and Hong Kong. Data released by the Chinese Ministry of Information and Technology reveals that the province of Guangdong currently boasts of 71 blockchain startups. This is about 16% of the blockchain firms in the world’s second biggest economy.

Two years ago the State Council of China included blockchain technology in a five-year economic development plan for the period between 2016 and 2020. At the time the State Council indicated that it was an emerging technology which would be instrumental in economic reforms of the country.

Recently a white paper by the Ministry of Industry and Information Technology of China revealed that the country’s blockchain sector witnessed exponential growth last year. According to the report 178 blockchain startups were formed last year and this increased the number of firms in the industry to 456. In 2016 the number of blockchain startups which were formed was 136.

Additionally last year also witnessed peak investment in the blockchain sector with 100 equity financing initiatives reported. The total number of equity financing initiatives for blockchain startups between 2014 and 2017 is 249. This year could see an even higher number of equity financing initiatives as during Q1 alone 68 financing initiatives have been announced.

According to China’s Ministry of Industry and Information Technology the country is already reaping the benefits of blockchain technology as costs have been brought down in some traditional industries and efficiency improved.

Per data obtained from WIPO – World Intellectual Property Organization, China filed the highest number of blockchain patent applications in 2017. Of the 406 blockchain patents which were filed last year 225 of the applications were from China and this was 55.4% of the total number of blockchain patent applications across the globe. The United States was in second position with 91 patents applications filed and this was 22.4% of the total figure. Australia was in third position with 3.2% of the patent applications.