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BY CNA team - June 14, 2018

Daily China Notes 0

Daily China notes

Daily China notes
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China’s Tech Giant Tencent inks deal with Shanghai Pudong Bank

Tencent, China’s leading provider of Internet value added services entered, on June 12th, into a partnership agreement with Shanghai Pudong Development (SPD) Bank, aimed at cementing cooperation in areas such as blockhain technology, AI, big data, cloud computing and anti-fraud technology. In April this year, Tencent inked an agreement with China First Federation of Logistics & Purchasing (CFLP) paving the way for the application of Tencent’s blockchain in logistics.

China CAICT assuages fears of patents monopoly by China monoliths

There is no need to worry about China-owned conglomerates dominating the blockchain industry via patents, said a senior government official.
Bao Hong, a researcher with the Ministry of Industry and Information Technology, downplayed fears of the big boys edging out the smaller players via blockchain patents, pointing to e-commerce Giant Alibaba as an example.
“Alibaba is a giant but they have not registered many patents,” he said, adding that the e-commerce monolith will most likely account for a small portion of the industry’s patents. “There is no need to worry,” he said.

People’s Bank of China: Blockchain technology helps management, does not replace it.

Blockchain technology is the decentralization of technology but it doesn’t replace astute business practices, according to Di Gang, the Deputy Director of Institute of Digital Currencies of the People’s Bank of China (PBoC).
Di stressed that for blockchain technology to gain global acceptance, its credibility is of utmost importance.

China’s Sanyan Blockchain Reach Strategic Partnership with HKBA
Sanyan Blockhain, China’s leading digital media and information services company specializing in blockchain technology and cryptocurrency, inked an agreement with Hong Kong Blockchain Association (HKBA), paving the way for the strengthening of communications in blockchain technology between Hong Kong and mainland China.
The partnership will help foster the growth of blockchain technology in China and Hong Kong.


June 12, 2018

China’s Yangzhou state government to use blockchain

The government of Yangzhou will employ cutting edge technology – such as Blockchain, AI, big data and the Internet of Things – in raising its software and internet game in the next three years, according to a government-paper entitled “Suggestions on Implementation of Upgrading “Three Innovation Sectors.”

Describing it as a top priority, the state government, hopes to lure local and international software giants to set up shop in the Jiangguang Integrated Zone between Guangling and Jiangdu District.

The paper adds that reputable software companies will gain by the resource sharing benefits afforded by the zone.

Bugs in EOS platform will be resolved

A senior security specialist has said that the bugs in the EOS platform – used in the past by hackers to remotely control nodes via videos – will be “gradually resolved”.

Peng Zhiniang, a security specialist at Qihu 360, China’s foremost internet security and service company, suggested the following to prevent exposure to hackers:

  • That the supernode be protected by the Sandbox (a security system)
  • Blocking unnecessary plugins
  •  The establishment of private VPN between nodes

Speaking at the “2018 Global EOS Developers Conference,” Peng warned against “exposure of the master node”. Peng was confident that the minor hiccups in EOS nodes will be resolved.

Blockchain and AI

Blockchain and Artificial Intelligence (AI) are effective tools for the debt-collection industry as financial loans are, at its very core, fintech, according to a university researcher, Liu Ying, researcher at the Chongyang Institute for Financial Studies of the Renmin University of China.

In addition, Blockchain’s eternal record of ownership, transparently linked transactions and traceable characteristics allow for perfect compatibility with Fintech products and S&T credits, allowing blockchain and AI draw the benefits of economies of scale whilst reducing marginal costs, Liu said.


June 11, 2018

PBoC – crackdown on crypto in advanced stage

A top official from the People’s Bank of China (PBOC) has said that their crackdown on crypto trading platforms and ICOs were “almost done”.

Sun Hui, a deputy director of the PBOC’s Shanghai office said that all Internet-related financial risks posed to the market have been “intensely controlled” since 2016, with “remarkable results”.

Sun, who was speaking at a press conference of the Shanghai Municipal People’s Government on June 7, said that the number of violations of financial regulations have decreased by 75% since their crackdown, with many illegal operators now flushed out of the market.

He added that risks to the economy arising from these new areas of financial activity have been eliminated.

He said domestic bitcoin trading platforms have exited the market and ICOs remain forbidden. “This reflects our resolutions in preventing financial risks to the market,” he said.

Be cautious about blockchain

China’s Development Research Center of The State Council has cautioned that there are still some safety issues to be resolved in all aspects of the new Internet economy, including blockchain technology.

Zhou Yi, in an article entitled “Four problems to be urgently solved in fostering new driving forces”, opined that it is necessary to strengthen risk prevention and controls and enhance efforts to research legislation and new policy for the new economy. This relates particularly to the field of the Internet, and other new technological developments such as blockchain, AI and security.

Blockchain use in government

Prof. Yang Dong, an associate dean of Renmin University of China Law School, said that blockchain technology can be applied in government affairs, which will government supervision and data protection to be improved.

Yang was speaking at a Singapore blockchain summit and also suggested that regulators should improve infrastructure in blockchain supervision and formulate risk prevention systems based on blockchain.


June 6, 2018

Vitalik — finance and gaming will be first to adopt blockchain

Vitalik Buterin, the founder of Ethereum said finance and gaming industries will lead the way with blockchain adoption. Vitalik was presenting on the development of Casper and Sharding projects at a technical Ethereum conference held in Beijing.

He had replied to a question by Jenny Yang, the chief editor of Sanyan Blockchain, a new China-based digital media and information service company.

Vitalik added that increasingly, he is seeing the adoption in other industries such as identity authentication and value chains.

Government research centre remains positive on blockchain

Hu Bin, a deputy director at the Chinese Academy of Social Sciences (CASS), a government research body, said that blockchain technology, which is rapidly developing in China, has a wide range of potential applications. Currently, blockchain technology has limitations in the speed of transactions, compared with traditional financial markets. Therefore, it is currently too premature to make conclusions about the advantages and disadvantages of blockchain. Hu Bin, who is from the Institute of Finance and Banking unit of CASS, said that the best thing to do is to keep an open mind about blockchain.

Meanwhile the president of the National Academy of Economic Strategy, another unit of CASS, said that blockchain can be used in financial innovation. Speaking at the China Financial Innovation Forum held on June 2, He Dexu indicated that financial services can be innovated through the integration of blockchain, big data, cloud computing and AI. He said these new technologies can improve efficiencies in financial services to benefit the economy.



June 5, 2018

Chinese investors told to be cautious over cryptos

Peking University’s Guanghua Blockchain Lab director Liu Xiaolei advises Chinese investors to be cautious over investing in bitcoin.

China, like many other countries in the region, has taken an ambiguous stance where investing in bitcoin and other cryptocurrencies are concerned.

Liu says those unfamiliar with the internet or blockchain should be cautious when investing and trading in bitcoin.

She noted that regulators have so far been unclear on the rules regarding investing and trading in bitcoins, inferring that both activities are allowed although initial coin offerings and cryptocurrency exchanges continue to be forbidden.

A leg-up for China’s financial system

Blockchain 3.0, which encompasses scalability and the creation of decentralised apps, could push China to be a leader in the global financial system, says Danhua Capital founder Zhang Shoucheng.

He says the third iteration of blockchain technology will facilitate the advent of the “data market” in which people can exchange data on peer-to-peer platforms while being assured that their privacy is protected.

Zhang says China can seize the opportunity in these areas and overtake the Western world’s dominance of the global financial system.

Former top official of PBOC: Blockchain solves payment problems

A former vice president of The People’s Bank of China (PBOC) said that blockchain technology will lead to disruptive

changes in the area of payments and offer solutions to solve technical difficulties.

Speaking at the Shanghai Blockchain Conference, Su Ning said blockchain technology can solve the problem of payments for people who do not own bank accounts, thus providing the public with more convenience.

Baidu Launches “Super Chain”

Xiao Wei, chief scientist of Baidu Blockchain, launched a solution for blockchain development dubbed Super Chain, a protocol that solves the energy issue facing the technology.

Baidu’s Super Chain is compatible with the development systems of Bitcoin and Ethereum and can support 100,000 concurrencies. Xiao Wei also said that search engine giant Baidu will complete a “blockchain transformation” of its business based on this super chain.

For example, Baidu has already released a blockchain project in relation with “copyright protection”.

Prior to that, Baidu Baike, a Chinese-language, collaborative, web-based encyclopedia owned and produced by Baidu, confirmed that a new function based on blockchain technology was released to enhance the fairness and transparency of entries



June 4, 2018

China research body unveils identity blockchain app

China Banknote Blockchain Technology Research Institute, a Hangzhou, China-based research outfit linked to the People’s Bank of China, has come up with a practical use for the blockchain.

It has released a blockchain app on June 1 called “Pick your picture” that allow users to upload pictures for registration.

The app also allows users to include the date and picture DNA to be fixed. These pictures can be stored forever and cannot be tampered with as the data of the picture DNA will be stored under network node consensus, as with any blockchain.

A timestamp will also be provided to prove that users own these pictures.


Using blockchain to fight scams

A group of Chinese researchers launched a white paper to fight scams recently titled “Digital Finance Anti-fraud white paper”.

The group consists of by JD Finance, Renmin University and the Criminal Investigation Police University of China.

JD Finance’s Wang Yueguo indicated that the blockchain can contribute to fighting scams, citing the example of quarterly and annual financial statements uploaded on to the blockchain.

Because blockchains are designed to be immutable, data will be difficult to tamper with while another additional feature is that there is a timestamp recorded for every update.

This will give investigators access to a plethora of data when fighting scams in the future.


China Everbright teams with JD to embrace blockchain

China Everbright Group, a Beijing-based financial services firm, has teamed up with e-commerce giant to pursue opportunities in financial services and innovation.

Both companies intend to cooperate in blockchain, cloud computing and the Internet of Things. They will undertake application designs such as tracing anti-counterfeiting, smart contracts and information sharing based on the distributed ledger function.

They will establish a “Fintech Innovation Lab” and a technology innovation industry funds, designed for incubating cutting-edge science and technology projects.

In the financial services space, both will collaborate in the areas of payments, insurance and fund investments.

Both companies had last August inked an agreement to cooperate in cloud computing, syndicated loans, joint risk controls, financing sales and the issuance of credit cards.

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