As one of the first significant nations to acknowledge the potential of the blockchain technology, China is ramping up attempts to drive global dominance over blockchain, the underlying technology behind digital currencies like bitcoin and a broad range of applications.

The country is racing ahead in building a robust blockchain network, as President Xi Jinping highlighted the crucial role of blockchain technology in the new series of technological innovation and industrial transformation last October, urging more attempts to stimulate the development of blockchain technology.

Xi’s speech unleashed a wave of activity, and presently the country is in the middle of a blockchain boom.

Specialists and entrepreneurs consider the government’s strong support for blockchain technology will promote the future development of the sector but warned that it is essential to be sane and not excite the concept.

Consolidating the application of distributed data storage, blockchain gives an open and decentralized database of any transaction, including goods, money, and property, etc. It provides a high level of safety by building a record whose authenticity can be checked by the whole community.

Wei Kai, deputy director of the Cloud Computing and Big Data Research Institute of the China Academy of Information and Communication Technology, stated as capital and expertise flow into the blockchain sector, the technology will be used to a wide range of real-world situations.

“The government’s strong support will further standardize and develop blockchain in China. The development of blockchain will also empower the financial sector and the real economy, as it will help improve efficiency, reduce operating costs and build a more efficient credit system,” Wei said at the recent Trusted Blockchain Summit 2019 in Beijing.

Wei remarked that blockchain technology would be a new frontier of change in various fields, including cross-border payments, logistics, global trade, government affairs, supply chain, finance, intellectual property protection, food traceability, and invoicing.

China is at the lead globally in terms of blockchain development, as the country is springing ahead in terms of blockchain patent filings, stated a recent report published by the China Academy of Information and Communication Technology.

As of July 25, 2019, there were approximately 18,000 blockchain patent applications globally, of which China valued for more than half of the total. Amongst the top 20 global corporate claimants, Alibaba and China Unicom have achieved the top spot and fifth place.

The report confirmed 2,450 blockchain companies had been established globally as of August 2019, in the areas of cryptocurrency and blockchain technology R&D. The United States surpassed all other countries in terms of the number of blockchain businesses, accompanied by China and the U.K.

The blockchain boom is sweeping over the whole nation. As of May 2019, more than 30 provinces, autonomous regions, and municipalities had published directions to develop blockchain technology, like Beijing and Shanghai, as well as Guangdong, Jiangsu, and Guizhou provinces declared the report.

“The major reasons for the emergence of this new technology were to solve the trust problem between multiple agents, reduce costs for communication, and improve efficiency for collaboration,” said Wei from the CAICT.

Nevertheless, Wei noted that blockchain technology is at an initial stage of development.

“We still face problems such as the lack of supervision, immature technologies and the hiatus between the demand for, and supply of, blockchain talents,” Wei added. “As we are driving to a blockchain future, we need to stay rational and not hype the blockchain concept. Not all scenarios require blockchain, and we should find the right direction.”

China’s blockchain investment is expected to see rapid growth in the forthcoming years, according to a recent report by global research firm IDC.

Over the projection period from 2018-2023, China will provide about 68% of all blockchain spending in the Asia-Pacific region, the report stated. In particular, the country will see a composite annual growth rate of 65.7% during the period, and the Asia-Pacific region records 50.3%.

Jeff Xie, the senior market analyst at IDC Asia-Pacific, stated the adoption rate of blockchain technology has been increasing at a constant pace.

Employees of a water service provider utilize a blockchain management system to evaluate the quality of drinking water at a current expo in Fuzhou, Fujian province.

“Use cases leveraging on the blockchain are maturing as well, filtering out the overhyped or solutions overselling the technology from the implementations where blockchain brings value to ecosystems,” Xie said in the report.

“The technology is here to stay; organizations need to assess the benefits that blockchain can bring to the business like the way it assesses other emerging technology, and identify realistic areas of implementation where the technology can reduce costs and increase efficiency. With proper analysis, leveraging the adoption of blockchain can assist organizations in enhancing their digital transformation journey,” Xie added.

Seeing the significant potential of the blockchain sector, many technology companies are gearing up to increase the blockchain-related business, and many have already made tremendous progress.

Chinese internet titan Tencent has operated closely with the tax bureau in Shenzhen in Guangdong province to roll out blockchain-based invoicing. And the first blockchain-based invoice was circulated to a local restaurant in Shenzhen in August 2018.

So far, the blockchain-based invoice system has swiftly embraced a wide variety of industries, including financial insurance, hotels, wholesale, transportation, car parking, retail, catering, property management, and internet services in Shenzhen.

As of Dec 24, 2019, Shenzhen had published more than 14.2 million blockchain-based invoices, amounting to 9 billion yuan.

Li Maocai, general manager of blockchain technology at Tencent, told Xi’s remarks highlighted the vital use of blockchain technologies, which will mostly encourage future development.

“Cryptocurrency is just one among the many applications of blockchain,” Li said. “With the government’s strong support, blockchain companies, experts, and institutes will accelerate their push for making breakthroughs in the underlying technologies and overcoming the current technological bottlenecks, which will inject new impetus into the whole industry.”

According to him, more attempts are required to combine blockchain with cloud computing, the internet of things, big data, and other new technologies to deal with real-world dilemmas, and Tencent will remain to investigate applications in blockchain games, blockchain-based invoicing, supply chain finance, and more.

Chinese blockchain giant Xunlei is also becoming serious about carving out a stake in the rapidly growing blockchain sector.

Presently, Xunlei has applied for more than 100 blockchain patents, mainly the core technologies.

As of October 2019, the company had launched products covering more than ten industries, including biotechnology, environmental protection, traceability, telecommunications, live services, advertising, information services, digital media, public welfare, insurance, catering, and copyright.

Xunlei’s partners included the digital marketing service provider Hylink, Copyright Protection Center of China and Naresuan University Hospital in Thailand, the company said.

Lai Xin, the chief engineer of Xunlei’s ThuderChain blockchain platform, stated as the government has shown great resolve in accepting blockchain, a broad range of blockchain projects will launch in 2020.

“In the long run, the key is to focus on the application of blockchain technologies,” said Lai. “Currently, the difficulty lies in the willingness of some enterprises and institutions to apply blockchain as well as the talent shortage. More efforts are needed to cultivate talents with big-picture thinking and cryptography professionals.”