Post #44: China rising
When breakfasting with an executive from IBM this morning, we were reminded of the importance of blockchain. As IBM puts it succinctly, blockchain has the potential to do for trusted transactions what the internet did for information exchange. IBM stands in a strong position to make such an assertion given that it is the leading US patent holder in respect of blockchain. However, an analysis of data from the World Intellectual Property Organisation (WIPO) shows what a potentially significant role China may play in the evolution of this crucial future technology.
WIPO data reveals that whereas IBM holds 89 blockchain patents, it ranks only number-two globally, surpassed by Alibaba, just ahead with 90 patents. MasterCard and Bank of America rank third and fourth in the blockchain league table, but most interestingly, the People’s Bank of China (PBOC) occupies fifth place. Not only does it have more blockchain patents than, say, Google or Microsoft, but it is also the only Central Bank globally to rank in the top-ten. Overall, China leads the world with the largest number of blockchain patents, having had 790 awarded by the end of 2018, versus 762 in America.
What to conclude from the above? As the title of the blog post suggests, China’s positioning vis-à-vis blockchain is another strong example of its emerging technological supremacy. Interestingly, while the US (in the broadest sense; consider the views of the Federal Reserve, the Treasury and many large players within the financial system) has not made an active move to endorse the potential embodied by blockchain, China seems to be making a concerted effort to integrate it into the country’s financial system. Various influential figures within China have advocated publicly the notion that the PBOC may be the first Central Bank in the world to introduce a crypto-currency.
When we look more broadly, we see ongoing evidence of China rising. Blockchain is just one example among many. Consider that China now holds 34% of the world’s patents relating to 5G (per 13D Research) and has, to-date, filed twice as many patents as the US relating to quantum computing (per Bloomberg). President Xi has also said on the record that he wants China to “lead the world” in terms of artificial intelligence by 2030. This story is only going to continue to run.
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