Introduction
President Xi Jinping emphasized during the 18th collective study session of the Political Bureau of the CPC Central Committee that "China has a solid foundation in blockchain technology and should accelerate its innovation and industrial application, actively promoting its integration with economic and social development."
Globally, major economies are rapidly deploying blockchain technology, with applications extending to digital finance, IoT, smart manufacturing, supply chain management, and digital asset trading. Integrating blockchain with socioeconomic development not only expands its applications but also positions China for global technological leadership and high-quality economic growth.
Current State of Blockchain Technology
1. Blockchain as a New Frontier in Global Tech Competition
Blockchain is a decentralized, distributed database system where transactions are recorded across multiple nodes. Its core features—traceability, decentralization, and trust minimization—make it transformative for finance and beyond. While Bitcoin popularized blockchain, the technology’s potential extends far beyond cryptocurrencies.
Key advantages:
- Decentralization: Eliminates reliance on central authorities (e.g., banks).
- Security: Cryptographic hashing ensures data immutability.
- Global interoperability: Facilitates cross-border trust without intermediaries.
Countries like the U.S., U.K., and Japan are aggressively investing in blockchain to maintain financial hub status, forming large-scale alliances to drive adoption.
2. Challenges in Blockchain Adoption
Despite its promise, blockchain faces hurdles in large-scale commercialization:
- Scalability: Bitcoin processes only ~7 transactions/second vs. tens of thousands in traditional systems.
- Node incentives: Lack of sustainable models to reward network maintainers.
- Energy consumption: Proof-of-work mechanisms (e.g., Bitcoin mining) are highly energy-intensive.
Applications of Blockchain in Economic and Social Development
Blockchain’s versatility spans multiple sectors, reducing信用成本 (credit costs) and enhancing efficiency:
1. Payment Clearing
- Cross-border transfers: Bypasses intermediaries, cutting fees by ~40% (McKinsey).
- Example: Blockchain reduces average transaction costs from $26 to $15.
2. Securities Trading
- Streamlines settlements: Nasdaq’s Linq platform digitizes equity ownership, enabling faster private trades.
3. Healthcare
- Secures patient data: Philips Healthcare uses blockchain for tamper-proof medical records.
4. Supply Chain & Logistics
- Tracks shipments end-to-end, reducing lost packages and ensuring delivery transparency.
👉 Explore blockchain’s impact on global finance
Regulatory Framework for Safe Blockchain Development
President Xi urged "strengthening guidance and regulation to ensure blockchain’s secure and orderly growth." Key steps include:
- Legal oversight: Establish clear laws for virtual currencies and decentralized applications.
- Global collaboration: Coordinate with international bodies to combat illicit crypto activities.
- Standardization: Develop unified technical protocols and contribute to global standards.
FAQ Section
Q: How does blockchain improve supply chain transparency?
A: By recording every transaction on an immutable ledger, stakeholders can trace product origins and handling in real time.
Q: Can blockchain work without cryptocurrencies?
A: Yes! Enterprise blockchains (e.g., Hyperledger) operate sans tokens for business process optimization.
Q: What’s the biggest barrier to blockchain adoption?
A: Scalability—current networks struggle with high-volume transactions.
Conclusion
China’s focus on blockchain-实体经济 (real economy) integration can boost productivity in manufacturing and services. By addressing technical and regulatory challenges, blockchain will play a pivotal role in the Fourth Industrial Revolution.
👉 Learn how blockchain is reshaping industries
Author: Qu Shenning, Associate Researcher, Chinese Academy of Social Sciences.