Chinese local governments and state-backed entities are pumping money into companies involved in creating the so-called metaverse, as the country competes to become the global center of the new digital craze.
On Wednesday, China’s newly formed Metaverse Industry Committee announced that 17 companies had been included in the organization to “promote the healthy, orderly and sustainable development of the metaverse”.
The committee, established in October by the state-owned telecoms company China Mobile, aims for companies to discuss new rules, policies and projects. It is one of the many initiatives involving state-backed groups and local officials that are also seeking stakes in metaverse companies amid an investment frenzy.
Western giants, including Facebook parent Meta and Microsoft, have already placed multibillion-dollar bets on creating technologies that underpin hyper-realistic virtual worlds filled with avatars, seeing the development as the next evolution of the internet.
China’s large internet companies including Tencent, Baidu and Alibaba Group have filed metaverse-related trademarks in recent months, hoping to dominate what Morgan Stanley in a recent investment note predicted could swell into an $8bn industry in China alone.
That Chinese government officials have also decided to support metaverse projects has surprised some observers given the concept’s association with the gaming and cryptocurrency industries — both of which Beijing has either curtailed or banned to curb gaming addiction and capital flight.
Chenyu Cui, a Shanghai-based gaming analyst at the research group Omdia, said the metaverse was not yet well defined, so could act as a vehicle for companies and local governments seeking to be part of the next technological breakthrough.
“The concept is so broad that any company can enter the metaverse, even if they really have nothing to do with it,” said Cui. “You see entertainment, medical and chemical firms all styling themselves as part of the metaverse.” She added the “metaverse” branding helps start-ups to court investment and listed companies seeking to boost their stock price.
Because the metaverse has developed into a catch-all phrase for any scientific or tech venture, analysts say local officials can harness it to suit shifting political priorities.
In recent months large Chinese cities, including Beijing, Shanghai and Shenzhen, have incorporated the metaverse into their city’s development plans and actively courted self-styled metaverse companies to set up shop in their backyard.
In January Tongzhou, a district in Beijing, set up a fund to help finance metaverse start-ups and pioneer research in the field. Meanwhile, the Shanghai city government recently opened a virtual hall that it planned to turn into an online portal for companies to interact with officials.
Cui said that while the “metaverse concept is hot right now” it remains to be seen which companies survive beyond this initial bout of enthusiasm. “That, of course, depends on what they actually develop,” she added.