Will China host the World’s Blockchain Capital?
China’s Rising Blockchain Capital?
As governmental institutions and private enterprises from around the world seek to explore the employment of blockchain in individual use cases ranging anywhere from credential management systems to supply chain provenance assurance, China has set its sights on fostering a hub for distributed ledger adoption dictated by private-public sector partnership for blockchain research, development, and experimentation.
Though on paper, Beijing currently hosts the largest number of blockchain companies in the nation, many are looking toward the amount of blockchain investment and niche media attention received by another of China’s tech-centric cities, which some acclaim as China’s distributed ledger technology “rising star”: Hangzhou.
Hangzhou’s New Blockchain Industrial Park
On April 9th, the Xiong’an Blockchain Innovation Fund launched with $1.6 billion (10 billion yuan) set aside for Chinese blockchain startups, the largest amount ever designated for a blockchain fund. This new development was announced at the grand opening of the Hangzhou blockchain industrial park in Hangzhou, China. The park will function as blockchain startup incubator, where companies that move in are promised to receive subsidies for office and talent recruitment, tax deductions, and government-funded support.
While the new blockchain industrial park and the announcement of the startup fund are poised to redefine the technological scope for the business landscape of the region, they are but the latest of Hangzhou’s distributed ledger developments. As a yearly event, the Global Blockchain Finance Summit is held in Hangzhou as a forum for industry experts to discuss different ideas and views, and for start-ups to display their innovative products to investors.
Today, the city ranks among China’s top three (the other two being Beijing and Shanghai) for the sheer amount of public and private investment given to blockchain initiatives within the city, as well as for the number of blockchain companies hosted within municipal confines.
A number of factors account for Hangzhou’s attractiveness as a hub for technological development.
Situated on the Yangtze River Delta Economic Zone, the city of Hangzhou holds an open growth mindset with a provincial government eager to bring innovation to the city, perhaps best evidenced by their hosting of the 2016 G20 Conference and the headquarters of corporate Internet giant Alibaba. Given Hangzhou’s status as the “e-commerce capital of China”, its thriving information services and software development industry, and its intermediate geography between the major large tech hubs of China, the region is promising future economic growth with its consistent inflow of top tech talent.
For years, the Chinese central government has taken an interest in distributed ledger technology and, given their inclusion of blockchain development in their 13th Five Year plan and their recent achievement of becoming the largest blockchain-patent holder, they are setting the stage for a future where blockchain tech encompasses all aspects of daily life.
Western Nations Are Still in the Running
While the governments of many leading developed nations in the West are trialing distributed ledger technology in bureaucracy and aiming to strike the proper balance between innovation and compliance, the Chinese central government is taking a more hands-on approach to allocating resources for blockchain research and development.
Still, currently US tech hubs lead the race for most blockchain startups by a mile, and the EU is notably looking to take a greater role in fostering an omnipresent culture for blockchain technology as well. With so many contending cities across the world seeking to establish themselves as the “Blockchain Mecca”, only time will tell what cities are able to strike the right balance between state-local government cohesion, integrative citizen engagement, and a healthy culture for technological development.