Can Mark Zuckerberg and his crypto-infused Metaverse challenge China’s crackdown?
China has been increasingly cracking down on its tech elite since last year. But with metaverse becoming a new technological horizon, is the country prepared to regulate it? Or, will metaverse be the panacea to China's tech companies?
China's long crusade against its tech giants has wiped out trillion dollars from its stock market. The crackdown began after one of China's most famous billionaires, Jack Ma, the co-founder of Alibaba Group, criticised the Chinese Communist Party in one of his speeches.
That single speech led to a crackdown from authorities on the growing influence of digital companies and the billionaires it created in the country.
Alibaba, Tencent, and Baidu were just the most prolific names that got caught in the crossfire. Hundreds and thousands of other smaller businesses felt the aftereffects of China tightening the noose around its digital goose. Shutdowns on the for-profit tutoring sector, gaming, entertainment and more soon followed as well.
Most of this was done at least ostensibly under the guise of President Xi Jinping's "common prosperity campaign". But as China's tech companies increase their investments into the metaverse, a network of 3D persistent virtual worlds that can be interacted with using AR/VR technology, questions arise about how the authorities will react.
Metaverse could potentially be a massive industry in China, as noted by Morgan Stanley analysts, who peg its value at a whopping $8 trillion in the coming decades.
But companies will have to be careful of not running afoul of Chinese authorities in their quest to build this new generation of the Internet.
Tech companies are already dreaming up services like coaching sessions and more, bypassing the question of existing bans and regulations.
Tencent, NetEase, TikTok's owner ByteDance, and Alibaba have already started to make huge investments and bets on metaverse being the next big thing.
Global companies like Mark Zuckerberg's Meta (named due to its new focus on the metaverse), Microsoft, Nvidia, Apple, Snapchat, Amazon and more are also making investments at the global level.
The success of the viral iOS app, Jelly, is equivalent evidence of the potential that the metaverse holds in China. Though Jelly's removal from the iOS platform due to a potential leak of user data also highlights the growing pain of the segment.
But while companies are making their foray into the Metaverse, China may already be preparing to co-opt it to suit its own rules and regulations.
The country has already set up the Metaverse Industry Committee – an organisation set up by state-owned China Mobile to regulate the development of the metaverse.
"Illegal financial activities, such as fabricating false Metaverse investment projects and issuing Metaverse virtual currency, should be resisted," said a guideline by the Metaverse Industry Committee.
This statement by the state-backed panel highlights the Chinese authorities' mindset on the metaverse – it is allowed as long as it is compliant with the party's ideologies and regulations.
The noted absence of cryptocurrencies, gaming, and social mixing from Chinese metaverse development is evidence that tech giants will be towing the party line even when it comes to virtual worlds in China.
