Shanghai, the financial and commercial hub of China, plans to ramp up support for the metaverse and other tech-related industries, as the country’s most populous urban area answers Beijing’s call to help lead the nation’s post-pandemic economic recovery.
This new initiative, which includes backing the development of low-carbon projects and smart terminal industries, is expected to “build advantages for future development” and become a “starting point for accelerating economic recovery”, according to a press conference held by Shanghai government officials on Friday. They said those three sectors combined are expected to be worth 1.5 trillion yuan (US$224 billion) by 2025.
“[Industries] such as the metaverse and smart terminals are expected to constantly spur new business schemes and models,” said Wu Jincheng, head of Shanghai’s Economy and Information Technology Committee, at the press conference. “[These would] give rise to ‘killer’ applications and popular products, releasing huge market value.”
The Shanghai government also aimed to establish an industry fund, with around 10 billion yuan in assets, dedicated to metaverse development. That financing will help the Chinese metropolis foster 10 leading companies and 100 small-sized firms, which could launch at least 100 “benchmarking products and services” by 2025.
The metaverse refers to an immersive virtual world, where digital representations of people can interact with each other like they do in real life. Virtual reality (VR) and augmented reality (AR) technologies are regarded as fundamental to the development of the metaverse, which is also considered as the next iteration of the internet.
“Metaverse will drive the transformation and upgrading of various industries in the real economy,” Wu said.
In March, state-backed Shanghai Data Exchange launched a metaverse-based recruitment programme, which enables jobseekers to virtually submit resumes to different departments.
At its annual economic agenda conference last December, the Shanghai government said it is encouraging firms to pursue research in VR and AR technologies.
Still, Shanghai pledged to guard against “excessive financial speculation and malicious hype” in that field, as regulators and some segments in China remain wary of the frenzy around metaverse projects.
In February, the China Banking and Insurance Regulatory Commission warned the public to stay alert to illegal fundraising schemes and scams related to the metaverse.
The Chinese Communist Party’s mouthpiece newspaper, the People’s Daily, in December last year alerted speculators in a commentary that property sales on the metaverse carried risks of volatility, fraud, illegal fundraising and money laundering. In November, state-run think tank China Institutes of Contemporary International Relations warned that the nascent metaverse sector could have potential national security risks.
The latest initiative by Shanghai, which reopened on June 1 after a strict two-month Covid-19 lockdown, reflects a major effort by the city of 26 million people to help drive the country’s economic recovery.
Chinese Premier Li Keqiang last week singled out Shanghai, along with the coastal provinces of Guangdong, Jiangsu, Zhejiang and Fujian, to help stabilise production and employment, unclog supply chain bottlenecks and steer the nation’s economy back on track, while controlling fresh Covid-19 outbreaks.
Shanghai is home to a growing number of technology start-ups, various final assembly factories for Apple products, electric carmaker Tesla’s Gigafactory and Semiconductor Manufacturing International Corp, China’s most advanced and largest contract chip maker.
Under its latest initiative, Shanghai will also build industrial estates focused on low-carbon fields such as hydrogen energy development, high-end energy equipment and low-carbon metallurgy. The goal is to nurture 10 industry leaders and 1,000 specialised companies in this area, according to Wu, from the city’s Economy and Information Technology Committee.
The city also plans to heavily invest in enterprises that manufacture various smart terminals – including VR headsets, smart home gadgets, robots and smart vehicles – which are expected to boost “the upstream supply chain”, Wu said. The aim is to help cultivate at least two companies, with potential annual revenue of hundreds of billions yuan each, and launch at least 100 smart terminals for areas like healthcare, elderly help and transport. South China Morning Post