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Chinese city of Zhengzhou announces $1.42 billion in metaverse incentives

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(Kitco News) - Blockchain-related developments in China continue to unfold despite the country’s ban on cryptocurrency trading as the city of Zhengzhou – the capital city of Henan province – announced policy proposals on Wednesday designed to support metaverse companies.

According to an announcement from the Zhengzhou Municipal Development & Reform Commission, the city is now seeking public comments on a proposal intended to help accelerate the construction of Zhengzhou's metaverse industrial ecosystem as the region looks to become an industry player at the global level.

The new policies are designed to help with the implementation of China’s national ‘Digital Economy Development Plan’ and the ‘Henan Province Metaverse Industry Development Action Plan,’ the announcement said.

To help get the initiatives off to a solid start, the municipal government will establish a dedicated fund worth 10 billion yuan ($1.42 billion) to foster growth and development in the industry.

The city’s government also plans to collaborate with other governmental agencies and investment firms to secure an additional 50 billion yuan ($7.08 billion) to support various metaverse-related development projects.

Metaverse companies that elect to relocate their headquarters to Zhengzhou will be eligible to receive startup capital investment of up to 200 million yuan ($28.34 million), and may also qualify for other benefits such as rent subsidies.

In order to qualify for additional benefits, companies are required to be an independent legal entity registered and taxed in Zhengzhou City.

“Metaverse enterprises refer to the research and development of underlying support technologies, terminal equipment manufacturing, and technical services in metaverse fields such as virtual reality (VR), augmented reality (AR), mixed reality (MR), digital twins, human-computer interaction, and brain-computer interface,” a draft of the policies said. The policies also apply to “enterprises focusing on the construction and production of metaverse scene content such as industry, education, cultural tourism, commerce and trade.”

Various rewards have been established for different metaverse activities, such as a 20 million yuan reward for companies that go public and get listed on the stock exchange.

Any company engaged in the development of metaverse use cases in the city, regardless of where the company is headquartered, can qualify to receive up to 5 million yuan ($710,000) for each project certified as viable by the municipal government.

According to the long-term outlook for metaverse development provided by Zhengzhou, the city’s municipal government anticipates that metaverse-related industries in the city will achieve an annual revenue surpassing 200 billion yuan ($28.34 billion) by the end of 2025.

Other industries that Zhengzhou is willing to support include next-gen computer rendering, human-computer interfaces and artificial intelligence. The city is also looking to establish a digital asset market using non fungible token (NFT) technology.

The public is now able to provide comments on the policy proposals, and all sectors of society are welcome to put forward their opinions and suggestions, the announcement said.

Former PBoC official calls on China to reevaluate its ban on crypto

In August, the Beijing municipal government announced a two-year metaverse innovation and development plan that was to be implemented from 2022-2024. The main focus of the plan is to promote the development of metaverse-related industries and help Beijing establish a benchmark city designed for the digital economy.

With this announcement, Zhengzhou joins a growing list of Chinese cities and provinces that are looking to establish themselves as the country’s metaverse hub.

On Monday, Nanjing, the capital city of China’s eastern Jiangsu province, launched its “Blockchain Technology and Application Innovation Platform of China,” a state-backed entity committed to promoting and enhancing metaverse studies throughout the country.

The new entity is led by the Nanjing University of Information Science and Technology (NUIST) and has a roster of founding members that represent a wide range of academic institutions and metaverse-related companies throughout mainland China. The purpose of the platform is to bring together the resources of academic institutions and enterprises in China in an effort to bolster research endeavors in metaverse-related fields.

The city of Shanghai is also actively pursuing its metaverse aspirations and predicts its metaverse industry will reach an annual revenue of 350 billion yuan ($49.6 billion) by 2025. Officials from the city presented their initial collection of 20 metaverse use cases in January, which included a range of applications such as virtual healthcare diagnoses and digital recreations of the city’s historic architectural landmarks.

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