A member of the National People’s Congress (NPC), the top legislative body of the country, suggested that China should launch a national blockchain development fund. Jieqing Tan, an NPC member, was quoted by China Business Network, saying blockchain could modernize the country’s governance system.
The NPC, comprised of nearly 3,000 delegates, recently started its annual session. Speaking at the event, Jieqing Tan said that ahead of the announcement of the next five-year plan of China, a national blockchain development plan should also be introduced.
Tan’s suggestion was a broad strategy to both use blockchain for smart government and also for industry to cultivate unicorn enterprises. It was positioned as a three-pronged approach: technology, industry and (government) supervision.
A few months ago, President Xi Jinping announced his support for enterprise blockchain and emphasized the need to capitalize on the technology. Chinese companies are already at the forefront of developing blockchain applications and top the list of global blockchain patents. Last month the country launched the Blockchain Service Network.
Others have observed that China is strong in blockchain applications but less so in the foundational technologies. Tan wants to see China as a leader in blockchain in both the technology and applications and proposes China should target a batch of core technologies. He also suggested it would help to protect national sovereignty, perhaps a reference to the Huawei bans in the West.
Blockchain would help in building a smart government to address issues including in fragmentation of data, uneven development, lack of mutual trust for collaboration and “urban data supervision”.
While the country is very active in blockchain, a significant proportion is within large enterprises or distributed over numerous small blockchain entities. These smaller players lack talent, investment, and room to grow. Moreover, a lack of standards further hinders development. Jieqing Tan said a special fund for blockchain could encourage entrepreneurs and fuel research and development.
“In such a market, only large enterprises are not enough, and a complete ecosystem is also required.,” said Tan.
In terms of specifics, Tan proposed selecting industries and enterprises, demonstrating relevant blockchain applications, and also developing government blockchains such as judicial certificates storage.
Additionally, he suggests policy and financial support, strategic guidance, and industry collaboration and coordination will help.
China has a thriving blockchain industry, and the central bank is also exploring a central bank digital currency (CBDC) which may use distributed ledger technology at the distribution peripheries. Either way, it can be used for on-chain payments.
Last year, a few Chinese firms came together to form the ‘Global Digital Bank Consortium Blockchain Investment Fund’, amounting to about $1 billion.
Some of the government sectors that currently use blockchain in China include trade secrets and intellectual property, government certificates, SME financing, counterfeit products, tax invoices, company registration and cross-border trade.