How China Integrates Metaverses into Its Economy
China's regulators find themselves at a crossroads. While the government seeks to leverage the metaverse for tangible economic growth, it's also placing curbs on digital advancements. Which strategy will win out?
China has underscored that digitizing its economy is a central pillar of its national growth strategy. This vision involves melding metaverse technologies with its vast industrial and economic landscape. The Ministry of Industry and Information Technology (MIIT) even rolled out a three-year plan for building the Industrial Chinese Metaverse.
The Chinese government firmly believes that the Industrial Metaverse can bolster China's competitive stance in the global landscape. This has led to the development of the China Industrial Metaverse White Paper. By June 1, 2023, about 170 patents associated with VR technologies have been registered. These technologies aim to bridge the gap between the virtual realm and physical manufacturing processes by the end of 2024.
One illustrative example is the metaverse crafted by Nvidia. As a trailblazer in AI development, the company launched a digital duplicate of BMW's production chain. This enables BMW to experiment and refine car production within a virtual setting. Another remarkable collaboration is between Kweichow Moutai, China's premier spirits manufacturer, and the tech giant NetEase. Together, they introduced a themed metaverse vineyard and have even rolled out NFTs adorned with images of liquor bottles.
It's crucial to highlight that the envisioned VR models (with a projected count of nearly 100) aren't tied to the gaming elements traditionally associated with the metaverse. Their entire thrust centers on real-world applications. These virtual domains will be regulated to ensure compliance with standards upheld by the Communist Party of China.
In this scenario, there's no room for frivolities – no entertainment, sensuality, or even dancing!
The paramount objective is a relentless quest for global economic supremacy!
Yet, the conceptualization of these ideologically aligned VR models faces headwinds, mainly due to regulators' reluctance to embrace digital assets. Top-performing virtual platforms, such as The Sandbox and Decentraland, lean on internal digital currencies for operational viability. The Chinese administration, however, deems any financial system that transacts in non-fiat currencies as potential hubs for speculative ventures and possibly illicit money flow. This stance implies that metaverses with their native tokens don't align with the principles of domestic regulatory bodies.
State-owned companies in China are now avoiding widely-used blockchains like Ethereum and Solana, turning instead to approved networks devoid of cryptocurrencies. In these environments, access is controlled by a select few verified entities, allowing for stringent oversight by regulatory agencies. However, these platforms have a narrow focus, attract limited users, and fail to position China as a strong contender in the global tech rivalry.
Put simply, Beijing might have aspirations to be a digital powerhouse, but its influence seems limited to its own borders. As the rest of the world leans into increased globalization and freedom, China's focus appears to remain insular, a stance not in line with its broader digital dominance aspirations.
Moreover, creating and maintaining these virtual platforms requires robust computer processors, largely manufactured by American companies in Taiwan. Given the U.S.'s dominance over global semiconductor distribution (including those originating from Taiwan), and the ongoing tensions between the U.S. and China, ensuring a consistent supply for Chinese developers becomes a complex challenge.
Some might say China is currently grappling with FOMO. Having missed prior opportunities in mobile communication, the internet, and artificial intelligence, the government now aims to outpace Europe, South Korea, and the U.S. in metaverse development. However, their forays into the metaverse strangely resemble knock-off Nike sneakers from AliExpress.