China’s top industry planner has released a new action plan for developing virtual reality in China. The action plan outlines key targets for the development of technologies related to the metaverse up until the year 2026 and proposes key tasks and measures for developing the industry. We discuss the significance of the plan and look at what the role of foreign investors may be in the future of China’s metaverse.
China has released the country’s first national-level policy document for the development of technologies related to the metaverse, including virtual reality (VR), augmented reality (AR), and mixed reality (MR).
The Virtual Reality and Industry Application Integration Development Action Plan (2022-2026) (the “Action Plan”), released on November 2, 2022 by the Ministry of Industry and Information Technology (MIIT) along with four other government departments, provides the most comprehensive set of policies yet for developing China’s metaverse, with key tasks and development goals for the period up until 2026.
Although the Action Plan does not directly mention “metaverse”, it seeks to develop the core technology upon which the metaverse is built, including various sub-fields of VR, AR, and MR, as well as essential hardware and equipment, industry supply chains, and governmental standards and regulations.
Below we provide an overview of the key tasks and implementation measures outlined in the Action Plan and discuss the significance of the new policy document for the industry and foreign investors.
The Action Plan is the latest signal that the Chinese government is taking the metaverse and related technology very seriously and that it views it as a key industry for China’s future development, stating that the technology will “profoundly change human production and lifestyles”.
“The Party Central Committee and the State Council attach great importance to the development of the virtual reality industry.”
VR is also listed among the “key industries” for the digital economy in the 14th Five-Year Plan (FYP), China’s overarching economic and industry development plan for the period from 2021 to 2025. The Action Plan was formulated in order to enact this part of the 14th FYP, calling upon various local governments and departments to implement measures to foster the industry’s growth.
The 14th FYP calls for innovation of technology, such as 3D graphics generation, dynamic environment modeling, real-time motion capture, and high-speed rendering, as well as developing VR machines, perceived interaction, and content collection, and production equipment.
The specific 2026 goals of the Action Plan include:
The Action Plan highlights five key tasks for the development of the VR/AR/MR industry over the next five years:
The Action Plan proposes a number of measures for achieving the development goals. Many of these focus on how government departments should work together and guide the industries’ development, pilot projects, and talent cultivation. Specific measures include:
The Action Plan is the clearest sign yet that the Chinese government is banking on VR technology and the metaverse to become the next big thing in the digital space. As with other emerging technologies – such as autonomous driving – China wants to ensure that it will not be playing catch-up with other countries to develop a home-grown industry.
More generally, one of the core goals of the Chinese government for the coming decades is to achieve technological self-sufficiency. This was a core tenant of the 20th Congress Party report, which sets the overarching policy agenda for the period until 2027.
For this reason, if in the near or longer-term, future humans will indeed be spending significant amounts of time in virtual worlds, the Chinese government will want to ensure that the domestic industry is not reliant on foreign technology and has the capacity to run the metaverse independently of other countries. This will not only help support the economy through the development of a potentially lucrative and high-growth industry but will also put Chinese regulators in a better position to shape the development of the industry and ensure it abides by Chinese laws and regulations.
This, however, does not mean that China’s VR industry and metaverse will be limited to domestic players. China has long aligned foreign investment policies with its core development and industry goals. The Catalogue of Encouraged Industries for Foreign Investment (2022 Version) actively encourages the participation of foreign investors in several fields related to metaverse technology, including:
In addition, the Action Plan directly encourages international cooperation on VR technology. As this plan serves as an initial guiding policy for the development of China’s VR and metaverse industry, we expect to see more targeted policy documents for various aspects of the industry, which may include more guidance on the participation of foreign companies.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at firstname.lastname@example.org.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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