A joint survey conducted by PwC and VeChain between November and December 2017 has found that logistics, government, and medical services are the sectors with the greatest potential to adapt blockchain technology in China.
PwC and VeChain Survey Finds Logistics, Government, and Healthcare Are Favorites for Blockchain Adoption
The Popular Republic of China has declared war against cryptocurrencies, clamping down on digital currency trading and prohibiting initial coin offerings, but it has consistently supported the underlying blockchain technology as a tool to disrupt most economic sectors. In 2016, the government has written the technology into its roadmap for the country’s development in the five years to 2020.
PwC and VeChain surveyed 130 companies online and 40 others through face-to-face interviews while focusing the questions on the application of the technology on non-financial sectors. Half of the companies surveyed have revenue of more than US$100 million.
While Mainland China regulators oppress the surge of cryptocurrency exchanges and the use of bitcoin as a means of payment, over half of respondents expect the underlying technology to have a significant impact on business. Sunny Lu, chief executive officer of blockchain company VeChain, confirmed that sentiment.
“Blockchain’s tamper-resistant and distributed data storage features enable us to improve traceability and transparency for logistics and supply chain management. These characteristics will be put to use in optimizing business transactions and trade relations”.
Excluding finance, logistics is considered a key industry to use blockchain technology for its capabilities of tracing the origin of stocks as well as track transport and store data. In second comes government as decentralized ledger technology is able to disrupt governmental documentation storage and transfer, as well as provide smart city planning.
The National Audit Office is preparing to use blockchain for its data infrastructure and a few governmental bodies in Mainland China have shown interest in the technology. This includes Hangzhou, the capital of Zhejiang province, which will be entering with 3 billion yuan (US$471 million) in a 10-billion-yuan fund dedicated to investing in blockchain development in China.
The third place goes to medical and healthcare services, which could use blockchain to verify the authenticity of personal, diagnostics and prescription information. Regulatory policy could limit the short-term reach of the technology, but policymakers have no intention of staying away from the disruption. For instance, China’s Ministry of Industry and Information Technology wants to set up a national blockchain standardization committee.
“Blockchain has transformative potential, its implementation can affect a company’s underlying business model”, said Cheung Chun Yin, a PwC China partner in Shanghai, adding that more companies will join the technology once there is a solid and comprehensive industrial policy.
Cost is not a considerable concern for the participants surveyed, ranking the lowest of the worries on whether companies will go ahead and adopt the technology.