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Chinese IT Ministry: China Experienced Rapid Blockchain Development in 2017

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whitepaper published by China’s Ministry of Industry and Information Technology shows that about 40 percent of all Chinese blockchain startups were developed in 2017.The 2018 China Blockchain Industry whitepaper was released on 20th May and notes that there were 456 companies in China for which blockchain technologies were their main business as of the end of March 2018.

According to the whitepaper, these companies cover all the key segments of both upstream and downstream legs of the industry, from hardware manufacturing, platform services and security services to industrial technical application services, finance, media and human resources.

Our blockchain industry is currently at a high-speed development phase – entrepreneurs and capital are pouring in, and the number of enterprises is rapidly increasing

– reads the whitepaper.

2014 saw the emergence of first blockchain companies in China, while the number of new enterprises in the sector rose to over 100 by 2016, which was triple the number from 2015.

In 2017 alone, the number of new companies reached 178, as the buzz around blockchain technology spread across China.

Equity Financing for Blockchain

The exponential growth of blockchain based startups corresponds with a similar trend in equity financing for blockchain ventures. According to the government data, there are currently 249 equity financing initiatives that directly relate to blockchain startups, and nearly 100 of them were introduced in 2017.

Due to the high influx of blockchain startups in the country, investors flocked into the market with nearly 100 equity stock investment deals in 2017, the most in recent years. In the first quarter of 2018, the number of equity investment deals reached 68.

CoinDesk says that judging by the current trend, since the deployment speed of blockchain technology is also accelerating and the market has begun to become rational, equity investors are more willing to invest in projects that see specific deployment scenarios. It is expected that the investment in the blockchain area this year will be at its peak.

Following the rapid development of the entire industry as well as an acceleration of project deployment speed, financing rounds will extend further back, and in future there will be even more projects entering the middle and later-stages.

– explained Yu Jianing, head of the MIIT Information Center Industrial Economy Research Institute and chair of the editorial committee for the whitepaper, to state media.

The publication is a comprehensive summary of the blockchain outlook in China. This is the latest attempt by the Chinese government to raise awareness within the public of the nascent industry through provision of data and information.

Although the report emphasizes the need for the country to continue banning Initial Coin Offerings, it also calls for another look at the current patent law, which it says is inadequate in its protection of intellectual property for blockchain technologies.

Image Credit: Deposit Photos

 

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