The Chinese government’s stance on blockchain is pretty clear: They are for it!
If you didn't know that before last weekend, then I'm sure you do by now. I hope you skimmed a little bit off the top on that ridiculous 40% move in one day. I even wrote about the BTC moon a little bit last week.
But the thing is that I don't know how you guys over there in Not-China ever got the impression that China ever did not support blockchain. The 2016 publication of the 13th Five-Year Plan (Read it here in English.) emphasizes “information technology” and the “Cyber Economy,” like a bunch of times. The word “blockchain” was not in this overarching national strategy document. But that doesn't necessarily mean that blockchain wasn't always on the mind of Xi, the president with the best, most consistent press op pose of all time.
However, in the follow-up paper to the 13th Five-Year Plan that focuses specifically on the IT plank of the greater strategy (If you had watched the cheesy video in my last post you would know how this works), we see the first official mention of the word “blockchain,” twice. Both mentions come in the context of a list of new and intriguing technologies. I'm gonna rely on Google Translate here but I know enough Chinese that I can confirm that these machine translations are basically right:
“New technologies such as Internet of Things, cloud computing, big data, artificial intelligence, machine deep learning, blockchain, and bio-genetic engineering drive the cyberspace to evolve from the Internet of Everyone to the Internet of Everything. Digital, networked, and intelligent services will be everywhere.”
“[Our goal is to] strengthen the development of new technologies such as quantum communication, future networks, brain-like computing, artificial intelligence, holographic display, virtual reality, big data cognitive analysis, new non-volatile storage, unmanned vehicles, blockchain, gene editing, etc. And the frontier layout, build a new field to take the lead.”
The Chinese government is always looking for ways to leapfrog other developed nations in their technological development path. They're also always in favor of policies that could potentially undermine US dollar hegemony. They have been pretty much in love with Big Data analysis ever since the word was invented. China's many ports handle more twenty-foot equivalent units (TEUs) than every other country in the world. Blockchain jives well with all of this!
What IS something to note is that In Xi’s very short speech titled something like “Blockchain is a core technology and important new breakthrough to accelerate the development of innovation,” delivered on Friday, October 25, he mentioned the word “blockchain” (区块链) 32 times. Here is an English translation of the landmark speech.
Two days later Huang Qifan, a former high-ranking bureaucrat, gave another important speech that outlined the imminent prospects of China’s central bank digital currency, the DCEP, which is also based on blockchain technology.
The increased frequency with which the Party is introducing these concepts to the wider public indicates to me that the government is in full-on promotional mode. Blockchain technology is going to be here for the future. It is going to underpin a lot of the important systems in China, not only in payments but also supply chain, taxes, AI, etc. This kind of stance is exactly why so many pundits say that we are still in the first inning or two in the trajectory of blockchain technology.
Now, obviously all this talk of "blockchain" does not mean one thing for any one particular cryptocurrency, including bitcoin. In fact, the rhetoric reminds me a lot of the old "blockchain not bitcoin" narrative from a few years ago. Nevertheless, the events of the past two weeks have provided quite the contrast. The Chinese government actively seeks out opinion and partnership with its Big Tech firms while in the midst of launching its own cryptographic monetary unit. At nearly the exact same time, the US Congress openly ridiculed one of its biggest, most famous Big Tech companies just for wanting to explore this area of research.
If last Friday was the beginning of the blockchain arms race, it looks like China has a running head start.