The conversation in China regarding the topic of blockchains is evolving. In a segment named “Dialogue,” on China Central Television’s (CCTV) Finance Channel, CCTV host Chen Weihong featured a discussion dedicated to educating its wide audience base on the concept, potential, and risks of blockchain technology. CCTV, the government-controlled main broadcaster, has said the economic value of blockchain is “10 times more than that of the internet.” It is perhaps the biggest official endorsement of the technology in the country so far.
The conversation featured prominent figures from the blockchain industry in both private and public sectors including Don Tapscott, the well-known author of “Blockchain Revolution”, Chen Lei, CEO of cloud network giant Xunlei, and Zhang Shoucheng, a physics professor at Stanford University and founder of Danhua Capital, a venture capital firm that invests in blockchain technology. Also present were government officials and international crypto expert Don Tapscott, the Canadian author of Blockchain Revolution. It was the first time that China’s top media outlet educated a domestic audience so thoroughly on the concept and the value of blockchain.
We are now entering an era where information is being decentralized so that individuals can own their individual data. This is what makes blockchain valuable and exciting.
In most countries, the restrictions on cryptocurrency exist primarily as a prevention against money laundering. In Beijing, the government’s main focus is maintaining control of the financial system. By making use of blockchain currency, the government is able to control all activities in the financial field. Of the top 10 companies holding blockchain patents in 2017, 7 of them are Chinese, including the one with the most patents, Alibaba.
With the high number of counterfeit goods in China, blockchain technology has wide applications in supply chain management. It could reduce counterfeiting by creating a secure and auditable record of the product’s journey in the supply chain. This would be to the benefit of Chinese farmers who have struggled with food safety issues and scandals. China’s e-commerce giants are already implementing blockchain food-safety solutions.
Automation on the blockchain referred to as ‘smart contracts’, is also a possibility in China. Beijing has invested heavily in artificial intelligence with the aim of becoming a global leader in the AI industry by 2030. Within smart contracts, the open-source blockchain Matrix is mentionable. Matrix is the blockchain and AI partner for Beijing’s One Belt, One Road Research Centre. Its mining power can be used in big-data analytics as a result of its AI capabilities.
Challenges of this big market
There are criticisms of the nascent technology and the topic of initial coin offerings (ICOs) did not escape the conversation. By summarizing some of the usual marketing slogans used by potentially fraudulent ICOs and having each speaker explain them to the station’s wide audience base, the program again signaled the station’s ongoing efforts to scrutinize cryptocurrency projects in China. CCTV has blasted domestic token sale activities as still “rampant,” despite a 2017 ban on ICOs in the country.
Initially, the digital currency business flourished in China because the market conditions were ideal and attractive to crypto miners. It was a win-win situation as local governments provided miners with generous electricity subsidies in exchange for a share of the profits. Before the crackdown, China was mining about 75% of the world’s bitcoins.
China’s embrace of blockchain is compromised. People’s Bank of China (PBOC) Vice Governor Pan Gongsheng urged the government to ban centralized trading of digital currency and prevent individuals and businesses from providing related services.
Beijing has made it clear that it wants blockchain, but not cryptocurrencies. It says that it is necessary in order to curb systematic financial risk. In short, it’s not interested in public blockchains, with tokens as a requirement because that’s the incentive for anyone to participate in the network. By banning cryptocurrencies, China is also rejecting some fundamental ideas often associated with blockchain technology, such as free asset movements and non-government-controlled money. The Chinese central bank is also developing its own centralized digital currency. In essence, this is a blockchain with Chinese characteristics.
Do you want to invest in the Chinese Blockchain?
China’s crypto community is excited about the change in tone, with the following three sentences trending on social media that CCTV used to define blockchain:
– Blockchain is the second era of the Internet.
– The value of blockchain is 10 times that of the Internet.
– Blockchain is the machine that produces trust.
Chinese President Xi Jinping called upon his country to take the lead in developing new technologies like artificial intelligence, the internet of things, and blockchain.
The realities of blockchain:
– Bitcoins are just one cryptocurrency application of blockchain. Blockchain technology can be used and configured for many technologies.
– Blockchain is particularly valuable in low-trust environments where individuals can’t trade directly or lack an intermediary.
– Blockchain data structure is appended only, therefore data can’t be removed. Blockchain could be tampered with if less than 50% of the network computing process is controlled and all previous transactions are rewritten. This is very impractical.
– Blockchain uses immutable data structures such as protected cryptography.
– Blockchain can verify all transactions and data entirely contained on and native to the blockchain, for example, Bitcoin. It cannot assess whether an external input is accurate, which is applicable to all off-chain assets and data digitally represented in the blockchain.
What we can do for you
The blockchain industry is still new and full of potential and opportunity in China. Your presence is welcome but needs to be guided and we can do that for you.
Work on your E-reputation
In China, your e-reputation (online reputation) is what determines your failure, or your success. Chinese consumers want to comment on your product or services through their social media platforms. They pay special attention to KOLs (Key Opinion Leaders), influencers that have the ability to bring revenue to your brand through a simple post.
The key is to make sure that your brand is known and in order to achieve this, as well as communicate with your target market, you need to use the same social media platforms that they are using, regularly uploading new content. High-quality videos and pictures that provide insight into hospitality services and transportation options can help to convince travellers to visit or purchase or make use of goods and services. It’s a waste of time and resources to focus on Facebook and Google when these sites are blocked in China.
Be familiar with Baidu
You need to familiarise yourself with Baidu, WeChat and Weibo. WeChat is one of the most popular platforms to engage and attract Chinese consumers, incomparable to any western social platform. Younger Chinese travellers are able to research, plan and purchase their trips abroad through the WeChat application alone. Increasingly, mobile payment apps such as WeChat Pay (similar to PayPal, but so much more) have become an indispensable part of their lifestyle and travel. This is another important means of connecting with Chinese tourists. Find brand ambassadors who will spread the news of your brand on Chinese platforms, making sure you stay visible and relevant.
The probability that the majority of sales will take place through e-commerce, rather than retail sales, is high. It’s something that you need to adapt your business module to and take advantage of. It is essential that your website is in accordance with Chinese standards and easily available to them in Mandarin.
The speed of your website should not be overlooked. The credibility of a website lies in one’s ability to access it. If it is slow to access, it gives the impression that your enterprise is behind in technology. In a country where everyone is super connected, this small detail is a handicap of note.
Gentlemen Marketing Agency
We are Marketing experts specializing in the Chinese market, here to help you to develop your business in China. We understand the needs of Chinese consumers. We also know the foreign brands’ difficulties when they try to enter the Chinese market. Each member of our team is specialized in a field, they have experience and they are effective. We can do basically everything, including offering you a great cup of coffee at our offices.