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Chinese Ministry of Industry and Information Technology Projects More Investments in the Blockchain Technology in 2018

The Ministry of Industry and Information Technology of China hopes this year would be another important year for the investment in the blockchain technology. In the last five months, 249 agreements for investments in companies dedicated to developing the blockchain technology. The first trimester of this year brought 68 investments in the blockchain sector.

According to China Money Network, a newspaper from China, the ministry informed it has already registered 249 investment agreements this year, which is more than double compared with the number of investment agreements last year. During the entire last year, the number of investments in the blockchain sector in China was almost 100.

According to the newspaper, there are 456 companies registered in China that are dedicated exclusively to development of technological solutions and the blockchain technology. Out of these 456 companies, 295 are focused on developing solutions for different economic sector, with 86 companies dedicated to providing services for the financial industry, according to the Ministry of Industry and Information Technology of China.

Likewise, the number of projects focused on the construction of blockchain infrastructure is around forty. However, the report of the ministry says the blockchain sector is still in its initial phase, which is why the investments were not made on a long-term basis. The ministry hopes this will change, which is why it predicts the growth of the investments in the blockchain sector. The report says: “As a reflection of the early-stage nature of blockchain technology, nearly 90% of the funding deals were for series A round or earlier stages. Around 9% were strategic investments, while only 2% were for series B round or after. This shows that blockchain is still in its infancy, and funding rounds will move toward later stages as more commercialized projects emerge.

China’s technology giants are building up their own blockchain research and applications, the report finds. Tencent’s TrustSQL is building an enterprise level blockchain infrastructure service platform. Alibaba is applying blockchain to non-profit organizations, product tracing, home rental and insurance. Baidu Inc teamed up with partners to launch China’s first blockchain-supported asset-backed security project and blockchain-backed ABS exchange. Inc is using blockchain to trace product origin to improve its anti-piracy effort.

In terms of geographical distribution, Beijing, Shanghai, Guangdong, Zhejiang accounted for the most number of blockchain companies. Over 80% of blockchain companies are based in these cities and provinces. Beijing leads with 38% of blockchain companies being based in the capital. Shanghai accounted for 21% of blockchain companies, while Guangdong province is home to 16% of the blockchain companies.”

It is important to know that the Ministry of Industry and Information Technology of China has been studying the developments in the blockchain sector for some years now. Two weeks ago, the ministry published an qualifying index for the main blockchain networks in the ecosystem, based on the applicability, free access and the transparency of the blockchains. This index was published shortly after the ministry announced the definition of standards for the blockchain activity in various sectors.

All these efforts and reports clearly show the interest of the Chinese government for taking part in the development of the blockchain technology, especially when the cryptocurrency trading survives despite the hostile policies and measures introduced by the Chinese financial regulators. Some people use names of dishes to talk and do business with cryptocurrencies, in order to avoid problems with the authorities.

Since September 4th last year, the Chinese government banned the initial coin offerings (ICOs) on the Chinese territory, which was a regulatory decision that was followed by another decision to close all the cryptocurrency exchanges operating in China. Nevertheless, according to a spokesman from the Chinese government, the ICOs are still rampant in the whole country, despite the prohibitions.

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