Last month, Chinese President Xi Jinping chaired a meeting on blockchain technology with party members. Predicting the technology to play a key role in the next phase of industrial transformation, Xi asked that the country strengthen research and innovation in the area to gain an advantage over other nations.
“Just like the Belt and Road Initiative’s railways and power grids, and Huawei’s 5G telecommunications networks, standardized blockchain solutions are a kind of basic infrastructure for future global economic activities… When Europe, Asia, even the U.S., have to turn to the Chinese for such solutions, there might be more Huaweis emerging,” Jenny Yang, the founder of BlockGlobe, a portal for news on blockchain and related sectors, said to the South China Morning Post.
While the Chinese government is planning to launch its own digital currency in the coming months, finance is not the only area where blockchain technology is being deployed.
Supply chain management
Recently, China’s Zhejiang Province introduced a new system that will use big data, AI, and blockchain to monitor the sale of counterfeit products on e-commerce platforms. The province administration has launched the “National Network Transaction Monitoring Platform,” which will fulfill a role similar to that of the U.S. Federal Trade Commission.
However, the difference between the two is that the Chinese platform will have more data on products. “The new system will monitor sales of products sold online. It will collect relevant information, including after-sales reviews, return records, and product promotions, to identify fake products in the market,” according to Ledger Insights.
An Australian company, Latitude 28, has reportedly entered into an agreement with the Shanghai-headquartered VeChain blockchain system to validate the quality of beef it exports to China. Each piece of beef will be placed in a vacuum-sealed package with a unique QR code. This allows Chinese customers to track the history of the beef, right from the slaughterhouse all the way to their local store.
China has also set up an Internet court backed by blockchain technology. Established in 2018, the Beijing Internet Court received more than 40,000 cases in about a year. According to the organization’s president, Zhang Wen, the parties involved in a dispute agree to use evidence validated by blockchain to settle matters in court in 40 out of 41 cases. The majority of cases are related to IP and online shopping. China’s Supreme Court has even recognized the legality of evidence provided by a blockchain. In June, the Internet court launched what is said to be the world’s first AI judge.
Cross-border customs clearance
China will be using blockchain in managing cross-border trade in the city of Hangzhou. “The new project, in collaboration with the Hangzhou Internet Court, plans for data from customs clearance, exchanges, taxation, transportation, and payments to be stored on a blockchain. This will improve the trustworthiness of information and, in turn, make for efficient auditing,” according to Ledger Insights.
Hangzhou sees almost US$37.4 billion worth of imports and exports through the region. Customs clearance has already been modernized with digital systems in the city. As a result, import clearance times have fallen from an average of 191 hours to 27 hours, while the average time for export clearance is just 0.2 hours. By implementing blockchain technology, the entire process will be streamlined, with accurate product tracking and invoices.