August 21, 2020

China’s Blockchain Landscape

Interest in blockchain in China has exploded over the past four years, fuelled by government support policies encouraging investment into strategically important technologies. This has led to impressive figures on patent registrations and startups launched, but the challenge of increasing the quality of blockchain research and implementations remains. This report maps the status of the blockchain industry in China.

Blockchain refers to a distributed database containing a list of records known as ‘blocks’. Information is designed to be securely stored so that records are unchangeable by a single party. Instead, consensus among network users determines whether information should be altered. Many blockchain projects also make use of smart contracts, which are digital agreements that execute themselves when criteria are met.

Fully decentralised blockchain networks are prohibited in China by network security regulations, which require data to be accessible to regulators. Networks are instead run by trusted nodes, or by member organisations of blockchain alliances.

The growing momentum of Blockchain Industry in China

Blockchain was written into the State Council’s 13th 5-year plan in 2016. This led to significant media coverage on the possibilities offered by a blockchain powered future. In June 2018 state-broadcaster CCTV described the technology as “ten times more important than the internet”. In October 2019, President Xi Kinping led a study session emphasising blockchain’s “important role in the next round of technological innovation” essential in the race to “keep China at the forefront”.

According to a 2019 Deloitte survey of enterprises, 73% of respondents in China viewed blockchain as a top-five strategic priority, compared to 56% in the U.S. In a similar 2018 survey, 49% of respondents in China said blockchain technology was already used in their organisations, compared to only 14% in the US.

Other key facts demonstrating China’s blockchain momentum include:

  • 3x increase in blockchain linked patent applications between 2017 and 2018
  • 30+ provinces with support policies for blockchain
  • 210+ patents awarded to Alibaba
  • 45,000+ registered blockchain companies

Private sector – application of the technology in the real economy

The private sector has access to the majority of blockchain related patents as well as blockchain developers. The sector is divided between three types of enterprises: Established technology companies; Blockchain-focused startups; Established non-tech businesses.

Established Tech Companies

GroupKey facts
Alibaba– Involvement in the blockchain spjere through affiliate – Ant Group
– Ant Group valued at $200 billion thanks to its payment platform Alipay
– Filed more blockchain patents than any other organisation for the past four years
– Ant Blockchain Open Alliance announced in July 2020
– Platform for building applications on Ant Blockchain (>50 real-world applications)
Baidu– Beta version of Xuperchain, blockchain service for businesses, launched in Jan 2020
– Allows developers to deploy ultra low-cost applications
Tencent– Applied for more than 700 patents in 2019
– E-Fapiao System, public-private collaboration for electronic invoice system
– Developed in partnership with Shenzhen Taxation Bureau
– Increases real-time monitoring of tax receipts, providing clear digital invoicing records

Established Non-Tech

Insurance company Ping An is one example of an established non-internet company with significant investment into the blockchain space.

GroupKey facts
Ping An– Developed trade financing platform eTradeConnect (launched in 2018)
– OneConnect (Ping An’s spin-off) has applied for more than 200 patents
– Blockchain platform for ports following a trial in 2019 in Tianjin
– Ranked fourth top enterprise blockchain provider


Despite a relatively high failure rate, many blockchain startups continue to launch every month spurned by the hype around the sector.

  • Data from LongHash estimates that in 2020, 10,000 blockchain companies were established between January and July.
  • Chinese blockchain startups raised a combined total of $3.5 billion in 2019
  • 2018 saw the greatest number of blockchain companies founded (18,000) with the number of deals and total funding 50% greater than in 2019.
  • At present, only 730 companies have been fully registered with the State Internet Information Office – a legal pre-requisite to launch genuine blockchain networks.

Following the crash in the value of Bitcoin, when its price fell by 65% from January to February 2018, global interest in blockchain companies fell. The ability of startups to funding was significantly diminished.

  • EqualOcean found that over 70% of failed blockchain projects in 2019 did not make it to their first year of operation
  • Local government support is available but virtually all are conditional on certain levels of capital invested or revenue requirement – Startups which are unable to reach this level are unlikely to be able to unlock this funding
  • Once valued at $12 billion, Bitmain has undergone a climb-down with its private market valuation falling to $4 billion.
  • Canaan, which went public on the Nasdaq at £1.35 billion in November 2019, currently has a market cap of just $342 million (August 2020)

Rhino Data’s report into blockchain financing found that President Xi’s October 2019 study session was followed by another wave of increased financing, as investors were reassured by the prospect of continued government expenditure into the blockchain sector. The leading blockchain VC firms in China are:

  • Fenbushi Capital
  • Danhua Capital
  • LD Capital
  • JRR Crypto
  • Node Capital
  • Block VC

Public Policy

The central government believes that investment in blockchain is essential for sustained economic growth and international influence. By including it as a core technology in top level plans, it highlighted to local officials that supporting the industry was likely to be rewarded. This has led to an ongoing competition for regions to offer the most attractive support policies to strengthen local ecosystems and encourage startups to relocate. It has also boosted the adoption of blockchain in e-governance and urban service provision.

Key central government related events include:

  • Blockchain included in the 13th five-year plan (2016-2020)
  • Ministry of Information and Industry’s ‘Trusted Blockchain Awards’
  • Digital RMB – untertaken by People’s Banks of China to create an electronic version of cash that could represent an alternative to Alipay and WeChat
  • Blockchain Service Network (BSN) – government backed network designed to reduce costs and steer developers towards blockchains that comply with central rules. BSN is a collaboration between State Information Centre, China Mobile and China UnionPay

Local governments have committed to making vast investments to support burgeoning blockchain enterprises. By 2019, this figure had already reached over 40 billion RMB, lde by Hangzhou’s 10 billion RMB Xiongan Global Innovation Fund.

Government guidance funds play a key role in providing funding opportunities and encouraging investments. Governments have also partnered with private companies or state banks to develop e-governance applications.

LocationIncentives available
Beijing– Talent training – Blockchain parks – Local blockchain fund – Rent subsidies
Shanghai– Research institute – Blockchain industry parks – Blockchain industry guidance fund
Guangdong– 1 billion RMB blockchain industry Fund – Huangpu – Industrial parks – Subsidies + Awards – Financial street funding – Foshan
Hainan– Blockchain pilot Innovation zone – 1 billion RMB fund pledged by Free Trade Zone
Guizhou– Free rent available – Grants, Awards and Subsidies – Talent support


Gaining access to talented blockchain developers, especially those with several years experience has proven challenging for the private-sector. This problem is compounded in regions which have smaller and less well-established technology ecosystems.

Chengdu launched the first undergraduate blockchain engineering degree, at Chengdu University of Information Technology. Other provinces have included measures in blockchain plans to provide funding for training as well as subsidised salaries for top talent.

Below is a list of leading universities with blockchain centres, labs or institutes.

Tsinghua UniversityBlockchain Research Center2018
Peking UniversityCuanghua Blockchain Lab2018
Fudan UniversityBlockchain Research Center2019
Renmin UniversityBlockchain Fintech Lab2018
Zhejiang UniversityBlockchain Research Center2018

Blockchain Talent Report 2019 found that the average entry-level blockchain salary is a third higher than entry-level computer science positions.


Successful implementation of blockchain emerge out of partnerships between local governments and large technology companies. Government support has led to impressive figures on patent registration and startups launched but the challenge of increasing the quality of blockchain research an implementations remains.

The experience of China’s more mature Artificial Intelligence sector shows that this is best achieved through stronger ties between the established tech companies and newer startups. Increasing the involvement of startups in public-private partnerships alongside larger enterprises will help to develop a clearer path for growth for recently established companies.

The above article is based on excerpts from Digiecon’s comprehensive and data-rich report on ‘China’s Blockchain Landscape’. The full report is available for acquisition for £100 (including VAT) and can be ordered via e-mail to