I read 98 pages of Chinese so you don’t have to.
Quick Summary
China plans to fully develop Web 3 technology with a whole-of-government approach on their own terms. Concepts like NFTs and metaverse will be embraced/discussed.
Not much mention of any chains like BTC, ETH. But the Chinese government have a deep understanding of the Web 3 citing all the right tech, famous artists and works. Most of which are coincidentally covered in unicmetaverse course.
China's Claim of Web 3 Origins
Starting in typical Chinese fashion: The white paper alludes that the concept of the metaverse was coined by a Chinese scholar, and NOT American or Western.
They trace the metaverse to Neal’s 1992 Snow Crash novel but casually mentions that in 1990, Chinese scholar Qian Xue Sen labelled VR “灵境” which had all the shades of the metaverse.
China’s Metaverse Definition per a 1997 scholar
“Metaverse” tech is a new practical tech driven by applications and involves many disciplines. It is a comprehensive integrated tech integrating advanced computer, sensing and measurement, simulation, microelectronics technology.
White Paper Introduction: First Famous Names mention
Somehow, they glossed over Vitalik, choosing to mention Gavin Wood, whilst also mentioning Beeple’s Every Day NFT sale.
In another official Chinese government report released in 2022, the Chinese government noted the benefits of Web 3:
a. Greater user freedom in controlling data
b. Endorsing the idea that people find value, identity & community on the internet
c. Web 3 will have a huge impact on the future economy
Potential of Web 3
Chinese government admits that Web 3 has the potential to help the digital world create an economically viable system of rights, information flow & commercial exchanges. There will be a convergence of digital and real world experiences.
According to the paper, Internet 3.0 will go through 3 stages:
a. Preliminary Phase
b. Transition Phase
c. Maturity Phase
Preliminary Phase
On the consumer side, simple VR experiences and virtual transactions can be done but limited in terms of governmental and industrial application.
Transitional Phase
Blurring of line between real and digital world with greater adoption & application of web 3 tech in government and industries.
Maturity Phase
6G, Neural Link application, Thousands of industries and companies built upon web 3 technologies and platforms. Becomes part of our lives.
Presently, the Chinese government thinks we are in the Preliminary Phase.
Web 3 is at the preliminary phase with gaming being the main touchpoint citing 2nd Life game, Roblox and Decentraland.
Besides gaming, Web 3 has ushered a trend of virtual concerts, virtual education & virtual shopping. They cited Travis Scott virtual concert in the game Fornite back in April 2020.
In terms of virtual shopping experiences, RTFKT and fewocious sold 621 sports shoes under 7 minutes with a transacted value of over 3.1 million USD.
Future Web 3 Trend & Direction
With the advancement of Web technology and the focus of institutions injecting capital to the space, more people are likely to join and participate in Web 3.
With time, virtual experiences will get better and more realistic, and establishment of a Web 3 economy and ecosystems will emerge.
Eventually, Web 3 will be all-compassing: Web 3 will NOT be limited to gaming, entertainment, social interaction, work or even exchange of goods/services but rather a coming together of ALL industries.
In the whitepaper, the Chinese government sees Web 3 standing for: Right of Everyone in Web 3 to freely create, display & share their work, and get paid for it.
In their opinion, a mature Web 3 must have 4 features:
a. Strong Virtual and Real-World Connection
b. Open-Source Creations
c. Mature Digital Economy system
d. Continuous uninterrupted development
Key from Point d is: No one or organization can interrupt or disrupt the stability of Web 3.
The paper also covered parts on AI, Blockchain Tech, Semiconductor Chips and went into a technical introduction of all of them a lot of which covered unicmetaverse course by University of Nicosia.
NFTs in China
The paper concedes China is late into the development of the NFT market, but Chinese local companies have shown strong desire to participate with Shanghai being the leader in setting up a NFT marketplace.
On the ground, major Chinese Universities have Metaverse Labs to encourage Web 3 ideas and talent. Some examples as follow:
7 April 2022: Beijing University of Posts and Telecommunications
16 April 2022: Tsinghua University (China’s Harvard)
*and many more
Overview of Global Web 3 Regulation
a. Covered Biden’s Ensuring Responsible Development of Digital Assets, CBDC
b. EU laws on AI, GDPR
c. Japan and Korea’s regulation
China Regulation on Web 3
A whole-of-government approach to the development of Web 3 in the same modus operandi of how they developed their Web 2 ecosystem and tech unicorns.
China approach: Have mini-giant companies to lead the push & test out the various new technologies.
Some important China regulation & laws Nov 2021: Data Protection Laws start to discuss metaverse laws
Dec 2021: 十四五 Digital Economy Development Plan committing to metaverse development and rules surrounding it
China’s Lens/Time Frame: Be Rational, Less Hype
See things as 5-10 year windows in terms of Opportunities whilst not overlooking 1-2 years of actual happenings/potential changes. Be far-sighted yet nimble.
Jan 2022: Chinese Govt commits to the development of a group of metaverse, blockchain, AI talents and small-medium enterprises
28 Oct 2022: China’s 5-Year Plan on Metaverse
Cooperation from ALL government agencies including industrial, education, culture, travel, communications department to develop a working model of Web 3 by 2026
1st Media Public Endorsement of Web 3 and NFTs: 1st time was 6 Sep 2021 where govt official news outlet CCTV2 endorsed the opportunities Web 3 presents but cautioned the risks too.
Current Web 3 Policies in China
As of April 2023, more than 30 provinces in China have pushed out some form of Web 3 development policy and measures. Special mention to Shanghai for taking the lead.
Shanghai advocates launching a NFT or NFT equivalent marketplace alongside covering art goods, intellectual property and Web 3 games.
ZheJiang Province advocates all round development of metaverse laws, systems that are global and encouraging local big companies to incorporate web 3 tech.
Web 3 Business Parks and Incubators: The white paper goes on to list the major cities in China that have business parks and incubators for Web 3 companies with subsidies on rent, tech & help to register patents.
Companies leading this country-led “assault” on Web 3 Development
Baidu, Tencent, ByteDance (aka Tik Tok), Huawei will be leading generals in this push for Web 3 development and adoption.
Baidu to lead on AI, Cloud Computing, VR and to launch a metaverse ready platform.
Tencent to focus on social media platform, digital content services as well as investing in Web 3 gaming companies like Roblox as well XR dev.
Huawei leads AR, 5G, AI, Quantum Computing charge and developing next-gen digital economy platform called Cyberverse.
NFT Platform Development on the China blockchain “Chainmaker” 长安链 is in the works and will be pushed out soon. No specifics given.
My Commentary & Analysis
There’s enough in the paper to suggest the Chinese government “endorses” the ethos of Web 3. That said, it’s unlikely that the Chinese government will yield control so those China is going to un-ban crypto trading is probably not going to happen.
We may face scary world reality as US cedes/cast away Web 3 (SEC goes after Coinbase, Binance) and its technology whilst China government develops their version and ecosystem of Web 3 incorporating the social credit score system.