China has a convoluted history with bitcoin, crypto, and blockchain technology. During a recent interview with CNBC, one investor described how China has a “love-hate” relationship with crypto.
On the one hand, China loves crypto because it plays a small but significant role in the Chinese economy. The world’s largest crypto miner manufacturers – including Bitmain – are based in China. Some of the world’s biggest crypto mining farms are in China. Numerous blockchain companies are located in tech centers like Beijing, Shanghai, Guangzhou, Shenzhen, and Hong Kong.
The China Internet Report found that 41% of new Chinese companies that received funding in the first quarter of 2017 were blockchain-related. China’s largest companies, including Baidu, Alibaba, and Tencent (the so-called “BAT” trio) are all actively building or investing in blockchain.
On the other hand, China has reason to hate bitcoin. The Chinese government likes to control what its citizens see, hear, and consume. Critics claim the value of the Chinese Yuan has been manipulated for years to prop up China’s economic prowess. While China has some control over bitcoin (through regulatory decisions), most of bitcoin’s power is decentralized.
In an interview with CNBC, Edith Yeung, head of 500 Startup’s China, explained the complex relationship between the Chinese government and crypto. Yeung made the statements during East Tech West.