When the Chinese government deems a sector important and sets out to shape its development, it turns to a proven economic strategy: industrial policy.
Now China is bringing this strategy to the metaverse.
China’s Ministry of Industry and Information Technology (MIIT) this week released a 12-page plan (link in Chinese) on the development of the virtual reality (VR) industry and the integration of VR with industrial applications like manufacturing.
The world’s first national metaverse industrial policy?
The MIIT document is China’s first national-level development plan for the virtual reality industry, according to the financial news site Yicai (link in Chinese). Previously, official efforts to direct state resources towards the development of a metaverse took place mainly at the city level.
MIIT has released a set of “guiding advice” on the development of the virtual reality industry end of 2018 (link in Chinese), but this document is older mainstream metaverse discussionswhich only took off on Facebook (now Meta) and Microsoft began discussing the concept publicly in 2019.
How supply chain disruptions will affect the metaverse
Although the last document does not explicitly use the term “metaverse”, it discusses in detail many technologies on which the construction of a metaverse would rely, such as head-mounted displaysand eye and gesture tracking technology.
And just because the metaverse lives in the virtual world doesn’t mean it can escape the supply chain problems of the physical world. The MIIT plan acknowledges this. He said China should aim for resilience by making its own breakthroughs in key software and hardware, to ensure domestic access to VR equipment and components.
The plan sets the goal of cultivating 100 innovative and influential “backbone enterprises” in the field of virtual reality and developing 10 pilot cities and industrial parks to demonstrate the industrial integration of virtual reality and augmented reality technologies in areas such as media, education, mining and natural disasters. management.
More broadly, MIIT calls for funds to be directed at the national level to support the virtual reality sector. It encourages the development oflittle giantsin VR, a nod to another industry program that offers grants, priority access to loans, and other preferential policies to small and medium-sized enterprises chosen by the government for their special products and know-how in strategic sectors.
Chinese stocks linked to the metaverse have surged
The Chinese government wants its national virtual reality industry to reach 350 billion yuan ($48 billion) in value by 2026, a multiplication by six compared to its level of last year, according to the development plan.
An index tracker stocks listed in China linked to the metaverse (link in Chinese) rose more than 5% on the news, with some constituent stocks jumping more than 20%. AVIT Ltd., a Shenzhen-listed maker of VR games and gear, saw its shares jump nearly 40% this week.
For China, the metaverse represents an important and emerging internet battleground. Establishing influence and dominance in this area will be key to achieving and sustaining China’s technological prowess, according to a state-supervised metaverse industry group.
Chinese companies are investing heavily in the field. In August, Unity Technologies, an American game developer whose products are increasingly used to develop augmented reality, virtual reality and the metaverse, entered into an agreement to form a Chinese joint venture called Unity China, valued at $1 billion. One of the joint venture partners is Guangzhou-headquartered PCI Technology, an artificial intelligence company specializing in facial recognition and video analytics.
Other tech giants, including Alibaba, ByteDance, the parent of TikTok, and state-owned telecommunications company China Mobile have also invested in Unity China. They have also individually directed other funds to the metaverse. China Mobile, for example, has a branch dedicated to creating VR and AR digital content. In March, Alibaba conducted a $60 million investment round in Nreal, a Chinese manufacturer of augmented reality glasses.