That ban helped set the stage for the development of China’s metaverse, experts say, as it decoupled virtual spaces from digital assets. “The main difference [in the metaverse] between China and the rest of the world, it would be heavily regulated in a centralized way,” said Zhengyuan Bo, a partner at China-focused research firm Plenum. “And there is only limited room for growth without it [digital assets] for generating revenue.”
It’s not just crypto that the government has cracked down on. Gaming, which has been a pillar of the metaverse in the West, has also come under pressure from above. Amid fears that young people were becoming addicted to online games, state media dubbed the industry “spiritual opium.” Between 2018 and 2022, the government froze the issuance of new game licenses for a total of 17 months and in 2021 limited minors to three hours of play time per week.
But the government is willing to support parts of the metaverse that it believes could be directly beneficial to the economy. Digital twins were included in Beijing’s 14th Five-Year Plan, the massive economic strategy document that sets the national agenda from 2021 to 2025. An action plan published late last year by five ministries, including the Ministry of Industry and Information Technology, promised the virtual reality industry to 350 billion yuan ($51 billion).
The high-level plan identified innovations they would like to see more of, including near-eye rendering (a way of projecting images onto a user’s eye); rendering processing (turning 2D or 3D models into realistic images), sensory interaction, and network transition.
But government support is conditional: Beijing has a vision of what metaverse technology will do for China. That means that instead of a virtual world where people can socialize, work and play, the metaverse should serve China’s physical economy.
“At the current stage, everyone is focusing on industrial applications from education, medical, travel and industrial development,” said Siri Chen, HiAR’s marketing director, from the company’s headquarters in Shanghai’s Zhangjiang Hi-Tech Park. . In a demo for WIRED, a HiAR employee acted as a factory worker in a HiAR headset and was remotely asked to repair a valve.
Other metaverse-related businesses have been running in anticipation of government investment. For Eric Liu, co-founder and CTO of Shanghai-based digital twin company Digitwin Technologies, the 14th Five-Year Plan helped shift his company to energy and manufacturing — “a field that wasn’t ready before” for this kind of technology , he says.
While the Chinese government’s desire to shape the metaverse may limit its scope, state aid may mean it doesn’t fall victim to the notoriously fickle tech sector, which moves ahead of trends at a rapid pace. Startups often try to be “in the middle of a whirlwind”, meaning the right trend with explosive growth potential.
“When something is buzzing in China, you see companies swarming into space,” said Jingshu Chen, co-founder of VR company VeeR. “However, if growth is not as fast as expected, more companies are likely to flip as well.”
