What’s a Metaverse with Chinese characteristics?

Jun 17, 2022 | Blog

Internet 2.0, the next evolution of the social network, a trillion business opportunity…The Metaverse has been described in several different ways and its nature will surely continue to evolve over the years. In November 2021, Facebook’s founder Mark Zuckerberg has become its most famous promoter after he decided to rebrand his company Meta.

This article first appeared on Daoinsights’s Opinions

In China, the Metaverse has struck a chord with young tech-savvy consumers who heavily rely on their mobile devices. But whether an empty buzzword or a promising concept, a wide range of Chinese technology companies have seized the chance to shape this new virtual ecosystem in which people can work, interact and play via online avatars: What will China’s Metaverse look like?

Chinese companies are rushing to create their own Metaverses

Chinese tech players are gearing up to explore the possibilities of the Metaverse, a sector on track to grow into a market exceeding $50 billion by the middle of the decade. Roughly 1,500 mainland Chinese companies have applied for trademarks related to the concept, despite Beijing’s regulatory crackdown on the tech sector, the domestic ban on cryptocurrencies, and the development of the digital yuan.

The e-commerce giant Alibaba showcased its metaverse ambitions with a $790 million investment in the augmented-reality unicorn Magic Leap in 2016 while Baidu has launched the first domestically produced metaverse, Xi Rang in 2021. This virtual world invites Baidu users to log in and create an avatar to explore the environment and engage with up to 100,000 users in real-time.

Among the ‘BATs’ (Baidu, Alibaba, Tencent), Tencent, owner of the ubiquitous app WeChat, is already China’s biggest contender for global metaverse supremacy. The conglomerate headquartered in Shenzhen has sizable stakes in other global metaverse players, including Fortnite creator Epic Games or the online game platform Roblox.

From a marketing point of view, luxury brands are already banking on this technology to seduce Chinese consumers while Morgan Stanley estimates the potential value of the metaverse at around 10 percent of luxury companies’ revenues in 10 years’ time. The French house Dior has launched its first-ever metaverse exhibition, “On the Road,” in April 2022 and showcased its Fall 2022 menswear collection through an interactive experience in Xi Rang.

Meanwhile, Zheli, a Chinese metaverse social app, became the most downloaded iOS app and a social media buzzword in February 2022 before being removed from Chinese app stores to address various technical issues.

“China Metaverse will probably be the biggest Metaverse in the world by 2030. Alibaba, Tencent, and Baidu are already investing in it. The Chinese Metaverse may not be powered by cryptocurrency blockchains but China is working on its own blockchain and is already using the digital yuan as an everyday currency.” said Timothée Semelin, Web3 Specialist and Founder of WEBTROIS agency.

In late 2021, the Shanghai government has announced that the metaverse would be a part of its 14th five-year plan for developing the electronic information industry, Beijing however, has remained ambiguous about the concept.


Ambitions meet challenges that lie ahead

The Metaverse continues to capture the imagination of Chinese consumers but China’s leaders are more cautious. On the one hand, a state-affiliated think tank, the China Institutes of Contemporary International Relations, has flagged the concept as a national security risk in October 2021 while asking for government regulation. On the other hand, various municipal authorities have organized metaverse-related discussions.

More recently, the Guangzhou Huangpu District and Guangzhou Development Zone jointly released the first policy related to the Metaverse to encourage domestic companies to form clusters and become “highly specialised”.

However, amid the metaverse fervor, questions have been raised about what it might look like in China, where crypto transactions are banned and the internet heavily censored.

Live censorship in the Metaverse is very hard to do and this is probably the biggest issue domestic companies will have to solve in order to get authorities’ blessing and go ahead,” said Timothée Semelin.

Chinese tech companies are aiming at a different approach to the metaverse that will not include cryptocurrency, decentralization, or financial assets due to past clampdowns on these technologies. China could end up cultivating its own ecosystem isolated from international metaverses, in much the same way it has developed a parallel internet with the Great Firewall.

For the moment, Beijing has adopted a wait-and-see approach to let the ecosystem grow on its own before coming out with a regulatory framework. Since the technology is still in its infancy, it will take years to see an operational Metaverse platform with a quality user interface.


The Metaverse has gained momentum in the Mainland but China’s official attitude toward it is mixed. Beijing has not taken any explicit steps to oppose the expansion of the sector nor expressed complete support for it. But with its readiness to embrace technological innovation such as virtual idols, the advantages of a sizable domestic market, and its lead in 5G adoption, China has all the cards to create its own version of the Metaverse defined by 3 key aspects: political censorship, crypto-free and government regulatory controlled.


Paul Muller

Paul Muller



Dao Insights was originally created by the Qumin Group. Dao Insights is introduced to aid brands, marketers, and individuals alike who are seeking to understand Chinese people and culture, to learn, and to improve their Chinese digital practices without having to leave their country or master the Chinese language. We want to eradicate cultural and professional barriers.