China has launched a “Blockchain Test Zone” section in its recently-established Free Trade Zone on Hainan island. The project already involves a number of big-name companies and institutions including Oxford University, the People’s University of China, and the Ministry of Industry and Information Technology. It’s another step towards China’s goal to become a world leader in the blockchain, if not cryptocurrency per se, technology field.
What the Blockchain Test Zone Hopes to Achieve
According to a (machine-translated) report on China’s People.cn, the “pilot area” will promote institution and industrial innovation, test economic reforms, and foster the development of a new IT industry potentially worth billions of dollars. It will do all that within the sandbox of a special economic zone that ensures co-operation between government, industry and research institutions.
The Oxford University Blockchain Research Center published a press statement on October 3rd, 2018, saying it had reached a “strategic cooperation” agreement with Hainan Resort Software Community (RSC) to jointly build a blockchain research laboratory.
People.com said the project, which also involves the Hainan Eco-Software Park, will study areas like e-government, international payments, and the potential for a “free digital port”.
Trading Exchanges Also Welcome in Hainan
Regular China blockchain industry commentator “cnLedger” noted that major exchange Huobi intends to move its headquarters from Beijing to Hainan, suggesting cryptocurrency companies are also welcome to develop their businesses in the zone.
Though it has been cautious (to say the least) on the issue of cryptocurrencies for daily use and investment, the Chinese government has been far warmer towards blockchain technology in general. Over the years it has made a series of positive statements and held lavish educational conferences to promote blockchain, and has stated its goal to make China a leader in the field.
China announced in April 2018 it would establish a free trade zone by 2020 in Hainan, an island province famous for its tourist resorts, and encourage international investment. The overall project includes a “free port” in Hainan by 2025 and initiatives to phase out “traditionally-fueled vehicles” across the province. Other industries participating — at least according to Reuters — are horse racing and sports lotteries, as well as tourism.
Special Economic Zones Helped Build the China of Today
Special economic zones have played a major part in China’s dramatic economic development since the late 1970s. As the country moved from its communist-style command economy of the previous decades since 1949, less-regulated zones in provinces like Guangdong, Zhejiang, and Fujian allowed localized experiments with more free market principles without impacting the country at large.
Inspired in part by the more laissez-faire conditions in (then) British-ruled Hong Kong, the zones paved the way for China to become a world leader in manufacturing and technology hardware. It’s one of the primary reasons Shenzhen, on the Hong Kong border, are the world’s largest developer and manufacturing centers for IT hardware — including the ASIC chips that power Bitcoin and other cryptocurrency mining.
Chinese workers flocked to live and work in the special economic zones which have boomed in both population and quality of life, gradually spreading reform to other areas of the country.
While China, for the most part, has a relatively low foreign resident population for a country its size (reportedly less than a million total) and its internet is something of a walled garden, it is also becoming more internationally-minded, with more of its citizens traveling and working abroad — and more international business and recreational travelers visiting China.
Is China serious about fostering a blockchain technology industry? Where will it all lead? Let’s hear your thoughts in the comments.
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