China Is Betting Big on the Metaverse as Zhengzhou Joins with $8.5B Fund – NFTgators

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Quick take:

  • Zhengzhou City has announced a strategic plan for the metaverse industry.
  • The Henan Province Capital plans to launch a 10 billion yuan (~$1.4 billion) fund, with an additional 50 billion yuan (~$7.08 billion) planned down the line.
  • The plan also indicates that the municipal government of Zhengzhou will provide other incentives for metaverse companies to set up shop in the city.

China’s big bet on the metaverse continues to take shape with yet another major city throwing its weight behind the idea. Zhengzhou City, the capital of Henan Province on Wednesday announced a strategic plan to support metaverse companies operating within its jurisdiction. 

According to the announcement, the municipal government of Zhengzhou also plans to offer incentives to try and lure more metaverse companies to set up shop in the city.

The government plans to launch a 10 billion yuan (~US$1.4 billion) fund for the metaverse industry. Zhengzhou also plans to team up with other government entities to expand the fund to a whopping 60 billion yuan (~$8.48 billion) in support of metaverse-related projects.

According to the report, metaverse companies that move their headquarters to the Henan capital will receive up to 200 million yuan (~US$28.34 million) in startup funding. Other government incentives include subsidies on rent, and cash rewards to metaverse companies that list on China’s main stock exchanges, Forkast News reported.

Metaverse companies already established in the city will also be eligible for up to 5 million yuan (US$710,000) for every project metaverse project deemed useful to the municipal government.

The fund will particularly be allocated to research projects related to virtual reality (VR), augmented reality (AR), and brain-computer interfaces. There are also big plans for projects that seek to explore opportunities in the education, commerce and entertainment sectors.

Although some publishers continue to dismiss the metaverse calling it a dead dream, China seems to have ambitious plans for the industry. Zhengzhou expects the metaverse to deliver annual revenues of up to 200 billion yuan (US$28.34 billion) by the end of 2025.

China has banned open-source public blockchains in the country, instead encouraging companies building on the blockchain to use its Blockchain Service Network (BSN) launched in 2022. And despite China’s restrictions on non-fungible tokens (NFTs), Zhengzhou also plans to develop a digital asset market based on NFT technology.

Zhengzhou is joining a growing list of Chinese cities that have announced ambitious metaverse plans, the latest being Nanjing. The Chinese capital Shanghai is also launching its own 10 billion yuan (~US$1.4 billion) metaverse fund by July 2023 and expects the metaverse industry to generate up to 350 billion yuan in revenues by the end of 2025.

China’s restrictive tech policies have made it difficult for companies to profit from the metaverse. Recently Tencent was forced to scrap its XR division, laying off 100 staff members, barely four months after constituting the team. 

Baidu’s head of metaverse operations, Ma Jie also quit his job after the Chinese internet giant seemingly sidelined its metaverse division to focus on generative AI.

Zhengzhou’s and Shanhai’s huge metaverse funds could give companies a new reason to continue pursuing opportunities in the immersive 3D world.

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