China Plans to Incorporate Blockchain in Attempt for Hainan to Overtake Hong Kong on International Trade
The Chinese government is planning to make the province of Hainan into a free trade port, focusing on facilitating free trade, investment, and cross-border capital flows.
The plan encourages government institutions to use blockchain and other emerging technologies to improve government functions.
Chinese President Xi Jinping has previously announced the decision to develop the island of Hainan into a pilot free trade zone in April 2018. With this decision, Xi said that it shows the country’s determination to liberalization and globalization while welcoming global investors.
The government’s plan has mentioned blockchain technology consistently, as it could have the potential to be used in social governance, as well as protecting data systems including intellectual property rights.
Overtaking Hong Kong?
Recently, the National People’s Congress in China made a decision to enact a “national security law” legislation for Hong Kong, to safeguard Hong Kong from foreign intervention and terrorist activities. This follows almost a year of democratic anti-government protests which swarmed the global financial hub.
China announced back in 2009 regarding its plan to transform its most populous city, Shanghai into an international financial center by 2020. However, the country faces difficulties in this transformation as China has a non-convertible currency and the Great Firewall, which closes off some internet sites in the country. These features have been inconsistent with global trading centers such as London, New York, and Tokyo.
China’s richest man and Alibaba Group chairman Jack Ma said that Hainan could be transformed to become a hub for the digital economy by taking the lead in making the Chinese yuan into an international currency.
According to billionaire Jack Ma, the province must aim to “overtake Hong Kong” by becoming a major player in the digital age of international trade.
The Central Committee of the Communist Party of China and the State Council said that the Hainan free trade port will be preliminarily established in 2025, and will become “more mature” by 2035.
The Chinese president has also encouraged the country on accelerating the development of blockchain technology.
China’s central bank official urges the acceleration of digitization of the Chinese economy with blockchain
China’s central bank, the People’s Bank of China (PBoC) Financial Technology Committee held its first meeting of the year this week, after months of delay due to the coronavirus pandemic.
Fan Yifei, the PBoC’s deputy governor echoed President Xi Jinping’s call for the acceleration of the country’s blockchain development adoption. The president pointed out that it is necessary to strengthen fundamental research of blockchain technology and enhance innovation, enabling China to take a leading position in the blockchain field.
The bank’s deputy governor met with the central bank’s officials as well as the heads of their affiliated financial institutions. Fan emphasized the importance of blockchain and financial technology (FinTech) industries and wanted to ensure China’s adoption plan would be laid out and implemented by 2021 to be in line with the deadline they have set out.
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