While Western tech giants like Meta are investing in virtual worlds for consumers in the metaverse, China is taking a different approach. The Chinese government is backing strategic technologies and setting rules to govern cyberspace. Rather than creating a virtual world for socializing, China’s metaverse aims to put technology to work in supporting the economy.

The Chinese Government’s Interest in the Metaverse

China’s Central Commission for Discipline Inspection defined the metaverse as consisting of digital twins, mixed reality, and the blockchain. However, the authorities effectively banned cryptocurrencies in September 2021, which decoupled virtual spaces from digital assets. While gaming, a key pillar of the metaverse in the West, has come under pressure from the Chinese government amid concerns over youth addiction, the government is willing to support elements that could benefit the economy.

The 14th Five Year Plan, Beijing’s economic strategy document from 2021 to 2025, includes digital twins as a priority. Additionally, an action plan published by five ministries, including the Ministry of Industry and Information Technology, aims to grow the virtual reality industry to $51 billion and identifies innovative areas such as near-eye display and rendering processing.

China’s Metaverse Companies

HiAR, an augmented reality company founded in 2012, helps local authorities in China identify mosquito breeding grounds via drone footage. In 2021, Chinese startups and tech investors started developing their own metaverse technologies or integrating mixed reality elements into consumer products.

While the buzz in the private sector has moved on to generative AI, the government’s vision hasn’t changed. “The government is rather focused on the long-term with policymaking,” said Jingshu Chen, cofounder of VR company VeeR. “The recent AI hype hasn’t affected how different levels of government continue to follow through their metaverse policies.”

Meta has recently reiterated its commitment to the metaverse, refuting claims that the tech giant has pivoted away from the virtual world in favor of AI. “Building the metaverse is a long-term project, but the rationale for it remains the same, and we remain committed to it,” said CEO Mark Zuckerberg.

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