RWR Report: China’s State-backed Blockchain Platform

On June 29, RWR Advi­so­ry Group pub­lished a new report, enti­tled, “The Emer­gence of Chi­na’s State-Backed Blockchain Plat­form” that is authored by RWR’s Sreya Vaidyanathan and Andrew Dav­en­port. The report high­lights the devel­op­ment of the Blockchain-based Ser­vice Net­work (BSN) and its role in Chi­na’s efforts to ensure that Chi­nese com­pa­nies are front-and-cen­ter in the stan­dard­iza­tion and inter­op­er­abil­i­ty of blockchain-based glob­al dig­i­tal infra­struc­ture.  This effort is a new point of empha­sis for Chi­na with­in the frame­work of the Dig­i­tal Silk Road.

Bei­jing per­ceives its suc­cess in this endeav­or as cru­cial not only to ensur­ing its long-term eco­nom­ic com­pet­i­tive­ness in the glob­al tech­nol­o­gy sec­tor, but also to per­suad­ing for­eign coun­tries to adopt its norms for gov­ern­ing the inter­net and dig­i­tal space more broad­ly.  One impor­tant way that Chi­na is seek­ing to achieve this objec­tive is through BSN, a state-backed blockchain sys­tem that Bei­jing is expand­ing both at home and abroad.

If lever­aged effec­tive­ly, the adop­tion of Chi­nese blockchain infra­struc­ture could fore­see­ably allow Chi­na to inte­grate – and hold influ­ence over – many of the core cross-sec­tor dig­i­tal solu­tions being imple­ment­ed by Chi­nese com­pa­nies around the world from finan­cial tech­nol­o­gy (fin­tech) to smart logis­tics to new sup­ply chain man­age­ment solutions.

The objec­tive of the Peo­ple’s Repub­lic of Chi­na to pro­lif­er­ate blockchain infra­struc­ture to for­eign coun­tries thus rais­es nation­al secu­ri­ty and strate­gic con­sid­er­a­tions for the Unit­ed States and its allies (as well as the tar­get coun­tries them­selves).  Indeed, Chi­nese blockchain solu­tions rep­re­sent anoth­er dimen­sion of how Bei­jing intends to enhance its lead­er­ship and influ­ence over the glob­al dig­i­tal econ­o­my, facil­i­tat­ed by state-owned or state-con­trolled enter­pris­es oper­at­ing abroad that are increas­ing­ly rais­ing con­cerns about their sus­cep­ti­bil­i­ty to being used by the CCP for espi­onage or oth­er strate­gic purposes.