Hong Kong leads Web3 race; China tackles digital divide

Barely 20 years since its launch, Hong Kong’s Cyberport has recorded astronomical growth, living up to its expectation as the primary driver of the government’s Web3 ideals. Elsewhere, China is pushing for greater collaboration with advanced and developing countries to address the digital divide.

According to a discussion paper released by Hong Kong’s Legislative Council, Cyberport has grown to host over 270 Web3 entities since its inception. It also highlighted Cyberport’s giant leaps while informing the public of the initiative’s progress in Web3 development.

The 14-page report showed that the government-owned commercial hub is now leading Hong Kong’s emerging technology ambitions, supporting the advancement of blockchain technology, artificial intelligence (AI), and Big Data.

The report notes that 270 blockchain firms reside in the hub, three of which are unicorns. These companies are building solutions in smart living, digital entertainment, fintech, and data security “to facilitate the development of a vibrant ecosystem.”

While most of the firms are local enterprises, 15% of the Web3 companies are from Mainland China and other countries, including the United States and the United Kingdom.

A key part of Cyberport is the support of fledgling startups characterized by providing capital injection and regulatory support for firms. An incubation program doled out up to $500,000 in grants to new startups in addition to technical support and consultancy services.

For firms looking to convert their blockchain-based ideas to prototypes, the Cyberport Creative Micro Fund provides $100,000 in support to each startup, while up to 30 firms receive up to $200,000 for market research activities.

Apart from merely providing funding, Cyberport is keen on expanding its partner network, signing a Memorandum of Understanding (MoU) with several entities. Early in the year, Cyberport inked a deal with Hangzhou Shangcheng District to collaborate while teaming up with U.S.-based Draper Dragon for a Web3 Accelerator Program.

A key piece in the puzzle is Cyberport’s push for a steady stream of investors for fledgling companies, launching the Cyberport Investor Network in 2017. The hub followed up with the rollout of the Web 3.0 Investors Circle (W3IC) to focus on blockchain-based companies showing significant promise.

Cyberport is also keen on developing individual talents to power the blockchain revolution in the region, launching an internship program matching university students with blockchain firms.

A shining light

Hong Kong has emerged as a shining light in the region for all things Web3, given an array of government policies to improve the sector. Foreign Web3 firms are offered tax incentives and licensing subsidies to set up shop in Hong Kong, with the banking regulator urging financial institutions to expand banking services to the new players.

A clear-cut playbook is seen as a step in the right direction for service providers and investors while an active regulatory watchdog provides compliance duties. As digital assets continue to thrive, Hong Kong is exploring the prospects of a central bank digital currency (CBDC) to improve local and cross-border payments.

China rallies for greater collaboration

While the Special Administrative Region is working on its Web3 ambitions, China has picked up the gauntlet to bridge the digital divide between countries worldwide, pushing for greater collaboration and resource sharing among nations.

In a video at the World Internet Conference in Wuzhen, Chinese President Xi Jinping said his country will support efforts to democratize the Internet while emphasizing the need for developing nations to catch up with advanced economies.

The incumbent leader pointed to the rapid development of emerging technologies like artificial intelligence (AI), Internet of Things (IoT), Web3, and Big Data and the searing pace of adoption. He noted that it is easy for advanced economies to leave underdeveloped nations behind, worsening the digital divide.

Chinese Vice Premier Ding Xuenxiang echoed Xi’s call, drawing attention to the ripple effects of the widening digital divide between nations. Ding identified potential cybersecurity risks, income inequality, education disparity, and dependency risks as pitfalls stemming from the digital divide.

The Premier issued several recommendations to even the odds for nations including improving global governance and promoting collaboration in AI. Ding added that investments in developing countries by advanced economies will play a major role in bridging the technological gap while focusing on talent development.

Conversely, developing economies will have to focus on providing a conducive environment for innovation via policies and a forward-thinking playbook. A focus on research facilities Web3, AI, Big Data, and IoT technologies will see developing nations leapfrog challenges to rub shoulders with advanced economies.

Meanwhile, local Chinese enterprises attending the Summit have signaled an intention to mirror the government’s policies supporting technological development in developing nations. Xiaomi CEO Lei Jun noted that the technology firm will advocate for an inclusive cyberspace for all and push for manpower support for African and Latin American nations.

Ericsson China shared the same sentiments, while telecommunication firm GSMA pointed to China’s pioneering role in bridging the gap.

A hot streak

China has an impressive resumé of attempting to bridge the digital divide, famously pushing for uniform AI standards by United Nations member states. Hailed as a step in the right direction, several member states have adopted the standards put forward by China in an attempt to rein in the fledgling ecosystem.

Despite a blanket ban on digital assets for speculative use cases, the economic superpower has been at the forefront of Web3 innovation. The People’s Bank of China (PBoC) has entered into several partnerships with its peers to test the viability of CBDCs for cross-border use cases.

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