•The Communist Party may see it as an area in which it can beat the West
The year is 2035. You are walking along the Bund, Shanghai’s storied waterfront, with two of your old classmates, pointing out how much has changed since the last time you were here 20 years ago. You almost joke about how the only thing that never changes is Xi Jinping being in power, but you think better of it. Someone might be listening. A message flashes in your glasses, and you say hurried goodbyes. The landscape of the Bund dissolves into the fantasy realm of a multiplayer game, where three friends in magical armour are waiting, swords at the ready.
The metaverse is for the foreseeable future quite literally science fiction: a fully immersive, persistent virtual world where, with the help of high-tech goggles and other kit, people interact, work and play via online avatars of their real-world selves. In the West, Mark Zuckerberg has become its most famous promoter. His renaming of Facebook in October, as Meta, accelerated a race among tech giants in Silicon Valley and Asia to be the first to turn the idea of the metaverse into reality.
There are reasons why the Communist Party might not want Chinese firms to join that race. “If you were to describe what a communist state doesn’t want, it’s the establishment of a virtual plane of existence that sits outside of, and without any, national boundaries,” says a consultant who advises Chinese-invested technology companies on metaverse development. Dan Wang, an analyst of the Chinese tech sector, wrote recently that if the metaverse does come about in China, “I expect it will be an extremely lame creation heavily policed by the Propaganda Department”. The party has also in the past year imposed severe time restrictions on youths playing online games, and encouraged tech firms to invest more in concepts, like smart manufacturing, that tie directly into the real-world economy. A form of technology that invites people to spend more time wearing goggles might seem suspect.
But there are signs that China does in fact want its companies to build the metaverse first, and to build it with Chinese characteristics: with content controls, monitoring, censorship and no scope for anonymity. The data-rich environment of the metaverse could be an authoritarian dream. There could be a digital record of everything that happens within it, including chit-chat at virtual cocktail parties that would remain private if uttered offline. Those inclined to joke about Mr Xi would be easier to identify and monitor. If someone is deemed to be spending too much time in the metaverse, they could be given a warning, then booted offline.
Much as the Communist Party has managed with the internet itself, defying the predictions of many in the West, the metaverse could become a powerful means of boosting the state’s grip on society. This authoritarian vision assumes a mastery of internet controls that may not happen. But the ambition to build metaverses, in China and elsewhere, is likely to take the contest between democratic and authoritarian values into a new, virtual dimension.
As with social media, the nuts and bolts of the metaverse will be built by companies, not the party. Already there is a metaverse gold rush in China to match the hype in Silicon Valley. By the end of 2021 some 1,600 firms had applied for 11,000 trademarks with the Chinese word for metaverse (yuan yuzhou) in them. From September to November venture capitalists poured 6.4bn yuan ($1bn) into Chinese metaverse-related technology like virtual-reality (vr) headsets and games, more than twice the sum invested in all of 2020, says Sina Tech, a website. That does not include the acquisition, announced in August, of Pico, a vr-headset maker, by ByteDance, the parent company of TikTok. The undisclosed sum is rumoured to be between 5bn and 9bn yuan. The leading Chinese tech firms, and many small ones, have announced metaverse plans. Share prices have shot up on the hype.
The central government has so far been mostly silent. In November state media warned against a speculative fever among investors. But authorities are beginning to ponder how to embrace virtual worlds. In December and January officials in the cities of Shanghai, Wuhan and Hefei put the development of metaverse technology into their five-year plans. In November the government of Zhejiang province held a “metaverse industry development symposium”, where speakers agreed that Zhejiang, home to Alibaba Group, should be at the forefront of the new technology.
In October the China Institutes of Contemporary International Relations (cicir), an elite think-tank affiliated with the Ministry of State Security, issued a paper on the metaverse. It described the concept as the next generation of the internet and warned of the need for laws and regulations to deal with “virtual labour”, economic crimes and other issues in “the grey area between the virtual world and reality”. cicir predicted that the concept was “likely to explode in the next five to 10 years”.
A think-tank at the Ministry of Industry and Information Technology, a powerful state regulator, convened a workshop in January on the metaverse with big Chinese tech firms, including Tencent, Baidu and Alibaba. The participants agreed on the groundbreaking importance of the metaverse and on the need for “risk countermeasures” to be “deployed in advance”.
To analysts, the workshop and the cicir report were signs that leaders are thinking about the metaverse as an emerging technology where they have a chance to beat the West. In official parlance, this is known as “overtaking on the curve”. “When there’s some kind of shift in emerging technology, China’s strategy is to try to develop it first and faster,” says Kendra Schaefer of Trivium China, a research firm. “We saw that in the 5g race.”
It will probably take many years for anything akin to a fully fledged metaverse to take shape, where people can toggle seamlessly from one activity to another while sitting on a public bus, lost in their high-tech glasses. For a long time the intermediate offerings will be a mix of virtual-reality experiences. Some early concept videos, including Mr Zuckerberg’s, have been mocked by users (despite plenty of investment from business titans). There are many technological challenges to overcome.
But China has the will and ability to pursue a metaverse with speed and vigour. The country’s state-owned and state-backed telecoms giants have outpaced their Western rivals in developing and building 5g telecoms infrastructure. They are well positioned to do the same with 6g and successor technologies, which will be essential to providing the enormous mobile bandwidth and high speeds needed for the constant, data-drenched connections the metaverse will require.
China also has deep-pocketed tech firms such as Tencent, Baidu and Alibaba, with the rudiments of the technology needed to support a metaverse, such as cloud-computing infrastructure. They are also already steeped in the different expected elements of metaverse life, including social media, gaming, e-commerce and virtual currency. And although the party is wary of these companies’ power, it wants them to help China “overtake on the curve” in new technologies.
Tencent may be the best positioned of any company to win the race. It is the world’s biggest publisher of games and one of the biggest forces in social media and e-commerce. It invests in or operates many of the most popular multiplayer online games in the world. It owns a minority stake in Epic Games, the creator of “Fortnite”, a game which Tim Sweeney, Epic’s founder, has called a possible vehicle for a metaverse. An edited version of the game was allowed a test run in China, but Epic gave up on that trial in November.
Official nervousness about controlling the metaverse could slow China down. But it has built systems for managing risk into each generation of the internet. Tech platforms like Tencent work to keep the government’s trust by self-policing.
And Chinese citizens will be careful about crossing red lines, lest they lose access to a virtual world that could become almost as integral to day-to-day life as the physical one. A Chinese metaverse would make possible the sort of dystopian, hyperbolic visions that are often predicted for daily life in China but that have not yet come to pass: the tracking of every movement and whisper, the tyranny of a social-credit score that rules everyone’s existence. But even if China’s future is not an episode of “Black Mirror”, a grim science-fiction television series, says one tech executive in China, “having some kind of more systematic way to manage this will probably be needed”. That the party will want that is a virtual certainty.
Credit | The Economist