For the first time, the words blockchain and digital currency have been officially written into China’s blueprint for the next half decade. The National People’s Congress published the 14th five-year plan — a guiding document for the country’s future social development and economic growth — after the curtain dropped this month on Lianghui, or “two sessions,” the most important parliamentary meetings in China.
With a focus on digital transformation, China is expected to invest more in technology research and development, including blockchain, with municipal and provincial governments following the national playbook and customizing it for their own local five-year plans.
Last month, Tsinghua University, one of the top universities in China; Blockchain Service Network (BSN), a national blockchain-based platform project; and Huobi Research Institute, a research arm of Huobi, one of the biggest crypto exchanges in the world, released “The Blockchain Industry in China-2020 Annual Report,” which examined the developments of blockchain in the past year and predicted the future of blockchain and digital currency in China.
Blockchain mentioned in China’s five-year plan for the first time
China’s 14th five-year plan, which covers 2021 to 2025, has a whole chapter on digital transformation in every sector of Chinese society ranging from real industries to governmental administration.
In a chapter called “Accelerating digitalization development and building a digital China,” the government pledged to “strengthen the innovative applications of key digital technologies” and “accelerate digital industrialization,” and mentioned the term “blockchain technology” for the first time in a five-year plan. “We will foster and strengthen emerging digital industries, such as AI, big data, blockchain technology, cloud computing, and cybersecurity,” the document said.
A content table of the chapter further pinpoints China’s blockchain technology targets for the next five years, including the development of smart contracts, multiple-consensus algorithms, asymmetric encryption, and distributed fault-tolerance mechanisms. The plan also describes the application of blockchain in China, especially developing blockchain as a service platform using consortium blockchain for fintech, supply-chain management, governmental affairs, among other fields of application solutions.
Blockchain as part of the new infrastructure
China’s plan also emphasized development of “new infrastructure” to facilitate the nation’s digital transformation, intelligent upgrading, and technology innovations.
Unlike China’s references to “infrastructure” in the past, which meant railways, highways, airports, seaports or other large construction projects, China’s mentions of “new infrastructure” now refers to the the tools, processes, facilities and technologies that support the creation, use, sharing and storing of information, including building more 5G base stations and high technology-backed governmental services terminals. In April 2020, the National Development and Reform Commission clarified the scope of technologies facilitating “new infrastructure.” Blockchain was officially named as being part of that list, alongside 5G, artificial intelligence and cloud computing.
Blockchain is a unique infrastructure example however, because its utilization is less clear than that of other technology on the government’s list. The purpose of 5G, for example, is to achieve a more speedy broadband cellular network. Blockchain, wrote the authors of “The Blockchain Industry in China-2020 Annual Report,” is a technology that could combine with other technologies to create new applications.
The Tsinghua, BSN and Huobi-coauthored report offered an example about the combination of AI and blockchain: AI’s development requires real-time sharing of a large volume of documents, hence the addition of blockchain will not only be conducive to more secure analysis of big data, but also can significantly improve the level of trust on the platform, achieving a more trustworthy AI development model as a result.
Ramping up new infrastructure is an imperative on a much tighter schedule than five years, according to the annual report. Governments are honing their policies and financial budgets to make major new infrastructure deadlines within the next two…