Analysis of Regulatory Policies in China's Blockchain Industry: A Comparison of Layouts in Five Major Cities

The blockchain layout of the five cities of Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou is closely related to their own economic, talent, and technological advantages. Based on their geographic advantages, the governments of these cities have also introduced a series of policy plans to support industry development.

Beijing: Early Policy Layout, Strict Regulation

As the political and economic center of the country, Beijing has also performed outstandingly in the field of technology. The Beijing government recognized early on the potential innovations brought by Blockchain technology and began policy planning as early as 2016, demonstrating a foresight that leads the nation.

In February 2016, the Zhongguancun Blockchain Industry Alliance was established, along with the Blockchain International Incubation Center. In December 2016, Beijing classified blockchain as a technology for internet finance. This indicates that the Beijing government encourages blockchain to innovate the financial sector together with fintech and other technologies.

In a series of plans and measures introduced in 2017, the Beijing government encouraged the exploration of innovative technologies such as Blockchain for research and application. The recently released "Beijing Financial Technology Development Plan (2018-2022 )" also includes Blockchain technology within the scope of "financial technology" development planning.

However, Beijing has very strict regulations on the blockchain industry, especially the cryptocurrency sector. After the announcement made by seven ministries on September 4th of last year requiring a halt to token issuance and financing activities, the Chaoyang District of Beijing issued a notice this August, requiring that no activities such as virtual currency promotion and presentations be held.

The policy direction of Beijing is closely related to its financial advantages and talent advantages. In the future, Blockchain may not only innovate in the financial sector but also potentially bring innovations in regulatory technology, thanks to Beijing's unique political positioning.

Regulatory technology is still a blue ocean in China, with financial institutions having enormous compliance needs that can be met through new technologies to satisfy regulatory requirements. If Beijing can seize its political location advantages and combine them with Blockchain, it should continue to lead the blockchain entrepreneurial boom.

Shanghai: Follow the pace closely after seeing the situation clearly

Shanghai once missed the development dividends of the internet, and its response to the emerging technology of Blockchain seems not very positive. However, in fact, Shanghai may be one of the earliest hubs of the blockchain industry in China. In June 2011, China's first Bitcoin trading platform was established in Shanghai. In 2015, the first Blockchain Global Summit was held in Shanghai, greatly promoting the spread of the blockchain concept in China.

However, the Shanghai government's policy support has not kept pace in a timely manner. It wasn't until 2017 that Shanghai began to make efforts in the blockchain field. In 2018, Shanghai further increased its support. In May, the Blockchain Industry Center was established; in June, the country's first provincial blockchain technology research center was unveiled in Shanghai; in September, Yangpu District released unprecedented support policies for the blockchain industry.

Despite the lack of early-stage policies that have caused Shanghai to lag in blockchain startups and patent applications, the blockchain industry is still in its early stages, and Shanghai still has the opportunity to seize this transformative opportunity.

Guangzhou: Industry First, Policy Follows

Guangdong is the province in China that has introduced the most blockchain-related policies, with Guangzhou and Shenzhen being particularly prominent. These policies mainly focus on the financial sector.

The development model of the blockchain industry in Guangzhou is to prioritize industrial practice, with the government subsequently introducing policies for guidance and support. In July 2017, Guangzhou established the Blockchain Industry Association; in October, it established the Blockchain Innovation Base; and in December, it introduced the first blockchain industry support policy.

Under the continuous favorable policies, Guangzhou currently has 6,131 Blockchain enterprises, ranking first in the country. In May of this year, Guangzhou further refined its Blockchain support policies. In October, the Guangzhou Development Zone announced that a new version of the policy will be introduced, aiming to foster 3-5 Blockchain unicorn enterprises.

With a large number of blockchain companies already gathered, Guangzhou still has great potential for development in the blockchain industry.

Shenzhen: Policy Highlights Ambitions of a Financial Technology Center

As the country's first innovative city, Shenzhen is at the forefront of smart hardware, biological sciences, drones, and other fields. In the face of the development of Blockchain technology, Shenzhen is also at the forefront.

From 2016 to 2018, several government departments in Shenzhen issued policy documents supporting Blockchain technology. These policies were mainly released by the financial sector, reflecting Shenzhen's determination to catch up with Beijing and Shanghai in the financial field.

Under policy guidance, Shenzhen is in a leading position nationwide in the application of Blockchain technology in financial scenarios such as cross-border payments and electronic vouchers. Shenzhen has also launched a large-scale fiscal subsidy policy, including financial innovation awards, special awards for financial technology, and a Blockchain venture capital fund.

Clear policy direction and significant fiscal support make Shenzhen's development in the blockchain innovation financial sector worth looking forward to. If Shenzhen's fintech develops, combined with the existing internet industry, it is expected to change the ranking of first-tier cities.

Hangzhou: Policy Guidance, Application-Oriented

Thanks to the drive of internet companies like Alibaba, Hangzhou has gathered a large number of excellent internet companies and technical talents, laying a foundation for the development of the Blockchain industry. Hangzhou has well-known companies in every aspect of the Blockchain industry, presenting a comprehensive development trend.

The Hangzhou government has shown early interest in Blockchain, and its policy attitude is relatively open. In April 2017, Hangzhou hosted the country's first government-sponsored Blockchain summit and launched the first Blockchain industrial park in the country. The Hangzhou government emphasizes the significance of Blockchain for future competition and requires leading exploration and layout in this field.

Compared to other cities, Hangzhou's financial subsidies for blockchain enterprises are not large, and the policies focus more on leveraging existing advantages to form an industrial cluster. As of August 2018, there are 55 companies engaged in blockchain technology services in Hangzhou, and the blockchain enterprise ecosystem is becoming increasingly mature.