Buy Us Out: Majority of Chinese Blockchain Companies Don't Develop or Even Use Blockchain Technology

Blockchain companies have become a hot property in China over the years, and the rise in company registrations surged following Chinese Leader Xi Jinping announcement last October that the country must strive to become the global blockchain leader.

According to a report from China Finance, many larger businesses across China are blockchain companies in name only and in fact have little to do with the groundbreaking technology.

Chinese Blockchain Boom?

LongHash data reveals that of the 79,555 registered blockchain companies in China, only about 26,000 are operating and 57,000 have lost their license and legal status.

In the first quarter of 2020, as the Coronavirus disruption began to shut down factories, offices and cities in China, a further 2,383 brand-new blockchain companies emerged.

As the number of registrations soared following Xi Jinping’s announcement, Wu Zhen, Head of the Key Laboratory of Internet Financial Security Technology of the National Internet Emergency Center was interviewed about the growing statistics stating: “There are more than 32,000 blockchains […] However, we found that there are actually not many companies that have blockchain technology or chain ownership […] About 10%, or even less than 10%.”

It appears that many of the smaller Chinese registered “blockchain” companies and startups have been found to be shell corporations trying to capitalize on the buzz with the ultimate aim of many of these “blockchain” companies to be bought out or absorbed by a larger technology firm.

Xi Jinping Keeps Pushing Blockchain

During a recent inspection in Zhejiang, Chinese President Xi Jinping emphasized the necessity for the various decisions and arrangements of the government to plan for prevention and control of the Covid-19 outbreak and economic and social development work.

The coronavirus pandemic which was believed to have originated in Wuhan, in the Hubei province in December 2019. The spread of the virus has led to the lockdown of many cities, especially in the province of Hubei. Production has slowed down as many Chinese citizens have not been able to go to work.

The Chinese Leader also visited the city of Hangzhou to review demonstrations of digital governance and digital epidemic prevention. To be able to advance in the modernization of the national governance system and governance capacity, the Chinese Leader emphasized the requirement for deploying blockchain, artificial intelligence, cloud computing, and other disruptive technologies to promote innovation and smart cities.

He pointed out the importance of the implementation for epidemic prevention and control as well as the resumption of production work to strive for the year’s economic and social development goals.

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