The Shanghai City Government released a policy document on July 8, 2022, outlining its strategy for build your metaverse the industry to 350 billion yuan, or $52 billion, by the end of 2025. The strategy focuses on developing the technical infrastructure needed for the metaverse, including VR headsets, chips, 5G and cloud computing, while promoting the creation of new businesses in the space. Like Dubai and other public sector entities, the Shanghai city government wants the expected jobs and economic value to come from the growth of the metaverse.
Investing in 3D Internet
Many large Chinese companies are already investing in 3D Internet. In 2019, Tencent announced a joint venture with Roblox, spanning a portfolio of projects ranging from social media to cloud computing to gaming. Alibaba has been investing in AR and VR technologies since 2016. ByteDance, the company behind TikTok, acquired VR headset maker Pico in 2021. Baidu released XiRang, their toolset and SaaS styling tool for third-party creators of Metaverse.
Collectively, six of China’s tech giants, including those mentioned above, have been ranked among the top ten global companies that have filed the most XR patent applications over the past two years.
A cautious approach to decentralization
However, a less prevalent key element in Shanghai’s strategy, unlike other cities, was blockchain-based technologies, including cryptocurrencies and NFTs. Despite Asian cities showing more interest in NFTs and digital assets than their western counterparts – not to mention China’s dominance of the proof-of-work cryptocurrency mining industry – the Chinese government has made it clear that it is taking a more cautious.
The companies, which are closely watched by the government, are following in the same footsteps: Baidu’s XiRang app will not support cryptocurrencies or trading assets representing virtual property.
A CNBC article reports that at the end of 2021, “the Chinese government’s Central Disciplinary Commission published an article on its website on the global history of the metaverse. The article also warned of the risk of hype non-metaverse media by some companies and the need for financial oversight in the virtual world.
Meanwhile, the government has been busy promoting its own central bank-issued digital currency called the digital yuan or e-CNY.
In many ways, this makes perfect sense. Blockchain is about decentralization, or the removal of power from central entities and the autonomy of individuals. Along with this come the qualities of anonymity, resistance to censorship, and resistance to tampering – qualities that don’t usually come to mind in the Chinese government.
Supervision and regulation
While the Chinese government clearly wants to reap the economic and political benefits of metaverse dominance, it does not relinquish its longstanding traditions of surveillance, control, and protection from Western liberal thought that marks many projects in the metaverse. and the so-called Web3.
This is just an extension of its approach to the current internet, where online channels are monitored, media outlets are controlled, and Western social media platforms are banned. Internet companies in China are tightly regulated by the government, and so will companies developing the Metaverse.
For the Chinese government, the Metaverse is an opportunity to continue to monitor the country’s population and disseminate organized information, but even more carefully. What’s this The Economist call him ‘Metavers with Chinese characteristics.’ Not that surveillance and influenced media don’t exist in Western countries, it’s just more prevalent in China.
AR/VR technology collects far more personal information than current 2D Internet interfaces – information that can reveal your emotions and state of mind, giving insight into your thoughts. A government-issued digital currency, even if it is blockchain-based, makes collecting taxes and tracking capital flows much easier for the government.
Final Thoughts on Shanghai Metaverse Strategy
With this in mind, it makes perfect sense that China would want to develop its own closed and controlled metaverse and not rely on technological or commercial pillars of the West. The current divide between the Internet, the West and the East will only widen.
Much of the discussion about walled gardens and metaverse fragmentation has focused on companies having their own virtual worlds. However, in reality, metaverses may be divided by the country or region they come from.
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