Metaverse is a new buzzword in China, bringing about a host of new and exciting business opportunities. Chinese technology companies have begun testing the water by developing metaverse-type apps, trademarking metaverse-related phrases, and investing in the VR/AR segment.
Recently, the capital city of China’s eastern Jiangsu province, Nanjing, inaugurated the China Metaverse Technology and Application Innovation Platform to foster and advance metaverse research and development across the country. The established system is led by the Nanjing University of Information Science and Technology (NUIST). The platform consists of founding members representing diverse academic institutions and metaverse-related companies throughout mainland China mentioned by the university on the official social media account.
Metaverse refers to a virtual universe or collective virtual space encompassing all virtual worlds, augmented reality and virtual reality experiences. It is an interconnected digital realm where users can interact with each other and with computer-generated environments in real time.
Importantly, in October 2021, the China Institute of Contemporary International Relations (CICIR), a think-tank linked to the Ministry of State Security, issued a paper on the metaverse in China warning of the need for lawmakers to deal with virtual crimes. Similarly, in November 2021, the government of Zhejiang province organized a “metaverse industry development symposium”.
Also, in December 2021, China’s central commission for discipline inspection published the state’s definition of the metaverse. It declared that the metaverse is composed of three technologies, Digital twins (detailed virtual representations of real-world objects), mixed reality (spaces that merge digital and physical experiences), and the blockchain. The authorities knocked down the third pillar by effectively banning cryptocurrencies in September 2021.
In China, a wide range of businesses have seized the chance to contribute to the growth of this new market. Chinese investors are seriously working virtual reality (VR) and augmented reality (AR) capabilities into their business models and product offerings, and businesses are developing software and hardware for these technologies. According to a report by Morgan Stanley, Chinese netizens seem to be particularly intrigued by the metaverse and leading Chinese tech firms have already begun to invest in a market that may be worth up to US$8 trillion in the future.
The Chinese government is willing to back pieces of the metaverse. Crucially, Digital twins were included in Beijing’s 14th Five-Year Plan, the enormous economic strategy document that sets the national agenda from 2021 to 2025. An action plan published late last year by five ministries, including the Ministry of Industry and Information Technology, promised to grow the virtual reality industry to 350 billion yuan ($51 billion).
China is strengthening its version of the metaverse that is suited to its economic ambitions, policy directives, and development of homegrown technical expertise, and matches the aspirations of its people. Investors and relevant stakeholders are suggested to pay close attention to the regulatory developments in this area.