China is poised to overtake the West in metaverse-related technology investments, according to research firm GlobalData, with the metaverse’s overall value emphasized by the nation’s continued push for advancements in virtual reality (VR), artificial intelligence (AI), augmented reality (AR), and 6G. As the Chinese government integrates VR into industrial applications, it demonstrates a commitment to keeping pace with emerging technologies.
However, the Chinese metaverse, or “Chinaverse,” differs from its Western counterpart, relying on a centralized, private blockchain owned by the Chinese government. With Chinese businesses increasingly exploring the metaverse, the government has begun developing regulations to prevent abuses and establish norms. Meanwhile, domestic tech giants like ByteDance, Tencent, and Alibaba see the metaverse and related technologies as a means to attract younger internet users.
China is also working on a blockchain-based service network (BSN) to make cross-border money transfers and other operations more transparent and efficient, aiming to address metaverse interoperability, enabling different blockchains to work together. Unlike most decentralized blockchains used in the Western market, the BSN will likely be centralized to maintain the approval of Chinese authorities.
The Chinese government’s 14th Five-Year Plan encourages metaverse use in various industries, with 18 innovation pilot zones already approved by the Ministry of Science. These zones will serve as the foundation for the nation’s metaverse infrastructure and future computing power in artificial and virtual intelligence. Local governments have increased incentives to support R&D in this field, prioritizing the metaverse in areas like Zhejiang and Hefei province.
Under this backdrop, Chinese companies are making “frenzied” investments to create the digital space of the future, with Morgan Stanley estimating the Chinese market’s potential at $8 trillion. Baidu, China’s search engine and AI systems provider, has filed a trademark application for “metaapp” and aims to be the catalyst for metaverse builders through its XiRang platform.
While companies in China have less regulatory leeway than those in the US, the user experience in the Chinaverse may be impacted due to restrictions on innovation. Beijing’s content laws ban gore and violent imagery, with certain popular games in China featuring green blood instead of red. Chinese regulators are cautious of digital payment systems used in US-based platforms like Roblox, Sandbox, or Decentraland, and may apply similar regulations to the Chinaverse.
