China to launch National Blockchain Network on Friday

Move hailed as a way to reform the finance industry, save the Belt & Road scheme, the economy

China to launch National Blockchain Network on Friday
China is set to launch a National Blockchain Network on Friday April 25, 2020. Image: Science Photo Library via AFP 

(ATF) With the oil crisis and Covid-19 pandemic, things are looking tough for China’s Belt and Road Initiative (BRI) — a US$3.8 trillion project to build trade routes to the rest of the world – as well as China’s plans to greatly expand its high-tech infrastructure.

Oxford Business Group has speculated that the coronavirus and other negative factors will be the end of BRI. But it turns out China has pivoted to technology and its credit ledger to keep things running. It will launch its National Blockchain Platform on Friday, April 25, which will be the foundation of a whole new futuristic age.

Warwick Powell, a Professor at Queensland University of Technology, told ATF: “Will Covid-19 kill BRI? I doubt it. BRI won’t be as grandiose in terms of signature projects, but I think that era is behind us all. Rather, it is going to focus more on the less visible infrastructure related to the information economy.

"First, it’s the policy centrepiece of the government and the president. Secondly, why would Covid-19 threaten BRI? (Problems are) the impaired ability of debtor countries to service loans. The response is the lender (China) agrees to refinancing. This could be forgiveness, (or) deferral.

"In China’s own capital reserves, credit is a fiction written in ledgers. The constraints are related to concerns that too much drives inflation. In present conditions it’s hard to see that happening given oversupply of productive capacity. And the digital yuan initiative will dovetail into this providing liquidity and reduced costs. It also tightens the ecosystem.

"I see this as a consolidation play. In restructuring the capital side of the ledger, China may see this as an opportunity to try to deepen its multilateral tie-ups. That is, it will see capital partners on projects to mitigate risk and create more 'win-win' configurations ... China has announced more trade e-commerce trial zones. The need to get trade pumping is imperative. E-commerce with BRI partner countries is one sure-fire way of doing this. The release of National blockchain infrastructure for third-party utilisation in the last week or so will open up pathways for new digital-enabling infrastructure."

'Smart' infrastructure

Wu Hao, director of China’s National Development and Reform Commission, said on April 20 that the blockchain initiative is guided by new development concepts, driven by technological innovation, and based on information.

China's leaders believe building "smart" infrastructure will get China through its current difficulties.

Wu listed the key technologies China will focus on: 5G, the Internet of Things, industrial Internet, satellite Internet, artificial intelligence, cloud computing, blockchain, new technology infrastructure and computing power infrastructure, represented by data centres, "intelligent" computing centres, and other technologies.

Wu says China is building converged infrastructure, which mainly refers to the deep application of Internet, big data, artificial intelligence and other technologies to support transformation and upgrading of traditional infrastructure.

The formation of converged infrastructure, such as "intelligent" transportation infrastructure and "smart" energy infrastructure, is supported by scientific research, technological development, and product development, via major science and technology infrastructure, science and education infrastructure, and industrial technology innovation.

Wu Hao said the opening of China’s National Blockchain Platform will be an “open alliance chain”. Blockchain would be used to reform the finance industry in China, including the new digital yuan.

China's official blockchain platform will be called the “Blockchain Service Network” (BSN), which will be launched on Friday, April 25. 

On March 24, the Ministry of Industry and Information Technology issued a "Notice on Promoting the Rapid Development of 5G" to fully promote 5G network construction, application promotion, technology development and ‘security.’ Digital identity authentication is top of the list of applications.