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China aims to integrate blockchain trying to get ahead of Hong Kong in foreign trading

Chinese Government is going to turn Hainan into the free trade port having focused on promoting free trading, investments and cross-border capital inflows.

Plan for promotion governmental bodies implies blockchain integration.

Chinese president Xi Jinping reported the decision to make Hainan island the pilot zone for free trading in April, 2018. While announcing this, Xi said that the decision demonstrates the country’s readiness for liberalization and globalization, at the same time welcoming foreign investors.

The governmental plan mentions blockchain technology as it can potentially be used for social management as well as for data system protection including intellectual property rights.

Surpassing Hong Kong. The National Congress has recently decided to adopt a low concerning “the national security” for Hong Kong in order to protect the region from foreign interference and terrorism. This follows almost two years of democratic anti-governmental protests that flooded the world financial centre.

In 2009 China announced its plans to turn the most populated Shanghai city into the world financial leader by 2020. But then the country faced numerous difficulties in the plan’s implementation as China had non-convertible currency and “The large firewall” that shut down some of the websites. All of these functions are incompatible with the status of global trading centre such as London, New York and Tokio. The richest man of PRC and the Alibaba chairman Jack Ma said that Hainan could become the world trading centre in case the Chinese yuan became the international currency.

According to the billionaire, the province should aim to “surpass Hong Kong” and become the major player in the era of digital international trading. The Central Comittee and the State Coincil claimed that the free trading Hainan port would approximately be created by 2025, and would be enhanced by 2025. But considering the high speed of the technologies’ development this may happen much earlier. Central Bank official calls for economic digitalizationon the basis of blockchain

Public bank of China and the Financial Technology Committee held their first meeting in 2020 this week, in a few months of delay due to the pandemic.  Yifei Fan, the deputy chairman of central bank, supported the president’s initiative to speed up the adoption of blockchain.  Xi Jinping also underlined the necessity to increase support for fundamental researches of the technology and to stimulate innovations that would enable China to occupy leading positions in blockchain development. The deputy chairman met with the central bank’s officials and the heads of its affiliated financial entities to ask them to implement the technology.

Fan underlined the importance of the industry of blockchain and financial technologies, and noted that the acceptance plan should be developed and integrated by 2021 in accordance with the fixed term.  Still one should be too naive to believe the terms defined by regulators are real, as they are never provided with the full and objective information on some issue. Digitalization and blockchain are ready for being launched. The only question is, who will be behind the technology, and who will manage it if it becomes dominant?