The growth of China’s blockchain business expansion appears to be slowing, per a new report – a sign that the blockchain explosion of the past two years appears to be quelling.
In October 2019, Chinese President Xi Jinping gave a speech where he called blockchain technology “an important breakthrough,” vowing that China would “seize the opportunity” to adopt. The event became a catalyst, leading to a huge surge in investment from blockchain startups, tech giants, and other companies from a range of sectors.
But according to China Email, the pace of this growth now appears to be slowing down – even though it is still outstripping increases in most (if not all) other nations. Part of the reason for the slowdown, the outlet reported, may have been linked to the coronavirus pandemic, which hit the nation and ravaged the economy at the start of 2020.
The media outlet published data released by the China Electronic Information Industry Development (CCID) agency, which reports to the Ministry of Industry and Information Technology. The data showed that at the end of 2020, there were 1,384 blockchain-specific companies in the Middle Kingdom – but when it comes to investment, the numbers are less impressive.
While there had been a combined total of 751 major blockchain investment and financing events in the years leading up to 2020 (primarily made in 2019), Chinese firms only made a combined total of 114 such investments last year.
“Compared to 2019,” the media outlet noted, “the growth rate [for investment] has slowed down.”
Regardless, the Chinese blockchain sector swelled into a USD 776m industry last year, a suggestion perhaps that companies are now focusing on product rollout plans, rather than R&D and funding efforts.
The CCID added that blockchain business growth increasingly appears to be concentrated on the capital, Beijing, as well as key tech hubs, such as Shenzhen and Shanghai, as well as the Yangtze and Pearl River Delta areas.
Elsewhere in the Middle Kingdom, the Chinese central People’s Bank of China (PBoC) has rolled out two “international” blockchain standards.
Per Jiemian, the standards pertain to distributed ledger technology (DLT) platform functionality evaluation methodology, and were developed by the PBoC’s Digital Currency Research Institute, in association with the China Academy of Information and Communications Technology, a leading IT research center, also answerable to the Ministry of Industry and Information Technology.
The PBoC and other government organs have insisted that standards are a must for the industry going forward – and some firms have been held back by the lack of central government-approved evaluation frameworks.