China’s leading industrial planner has released a new action plan for virtual reality development in China. The action plan outlines key goals for the development of technologies related to the Metaverse by the year 2026 and proposes key tasks and measures for the development of the industry. We discuss the significance of the plan and look at the role foreign investors could play in the future of China’s metaverse.
China has released the country’s first national-level policy document for the development of technologies related to the metaverse, including virtual reality (VR), augmented reality (AR), and mixed reality (MR).
That Virtual Reality Development and Industrial Application Integration Action Plan (2022-2026) (the “Action Plan”), released on November 2, 2022 by the Ministry of Industry and Information Technology (MIIT) along with four other government departments, provides the most comprehensive set of guidelines for China’s development to date metaversewith central tasks and development goals until 2026.
Although the Action Plan does not mention “Metaverse” directly, it seeks to develop the core technology upon which the Metaverse is built, including various subsets of VR, AR, and MR, as well as essential hardware and equipment, as well as industry supply chains, and regulatory standards and regulations.
Below we give an overview of the most important tasks and implementation measures of the action plan and discuss the importance of the new policy document for the industry and foreign investors.
The action plan is the latest signal that the Chinese government takes metaverse and related technology very seriously and views them as a key industry for China’s future development, declaring that the technology will “profoundly transform human production and lifestyle.” .
“The Party Central Committee and the State Council attach great importance to the development of the virtual reality industry.”
VR is also listed in the “key industries” for the digital economy 14. Five Year Plan (FYP), China’s overarching economic and industrial development plan for the period from 2021 to 2025. Formulated to implement this part of the 14th FYP, the action plan calls on various local governments and ministries to implement measures to promote the growth of the industry.
The 14th FYP calls for technological innovations such as 3D graphics generation, dynamic environment modeling, real-time motion capture and high-speed rendering, as well as the development of VR machines, perceived interaction and content capture, and production equipment.
The concrete goals of the action plan for 2026 include:
- Achieving significant breakthroughs in key 3D technologies, VR integration and immersive audiovisual technology
- Enriching the new generation of human-friendly VR terminal products
- Make improvements to the industrial ecosystem
- Widespread application of VR in key economic and social sectors
- Development of key companies and industrial clusters with strong international competitiveness
Main tasks of the action plan
The action plan highlights five key tasks for the development of the VR/AR/MR industry over the next five years:
- Promote the integrated innovation of key technologies. This means accelerating technological breakthroughs in key technological sub-areas such as near-eye display, graphics rendering, perceptual interaction, network transmission, content creation, compression coding, and security and trust, while enhancing collaboration with 5G and AI.
- Improving the supply capability of the entire industry chain. This includes improving the delivery capacity of key VR equipment, terminal peripherals, business operation platforms, content production tools and dedicated information infrastructure. The task is also to improve the comfort, usability and security of the VR end products.
- Acceleration of cross-industry and cross-scenario applications. This requires deepening the organic integration of VR and industries with the potential for large-scale or specialized implementation, such as Such as industrial production, cultural tourism, integrated media, education and training, sports and health, business, performing arts and entertainment, security and emergency response, disability assistance, smart cities and more.
- Strengthening the construction of the industrial public service platform. This includes building a common application technology support platform, an integrated immersive content development platform, and an integrated application incubation and cultivation platform to strengthen support for the development of the VR industry.
- Building an integrated application standard system. This contains Strengthening top-level standards and building a comprehensive VR standard system for secure and trusted technologies, including near-eye display, graphics rendering, perceptual interaction, network transmission, content production, and compression coding.
Measures to achieve goals
The action plan proposes a series of measures to achieve the development goals. Many of these focus on how government agencies should work together, guiding industry development, pilot projects and talent nurturing. The specific measures include:
- Promotion of integrated development of large and medium-sized enterprises (SMEs) and the cultivation of “specialised, sophisticated, special and innovative” enterprises (referring to enterprises with strong business specialization, sophisticated management, specialized processes and a high degree of innovation).
- Promotion of R&D investments and supporting companies, universities, scientific research institutes, standards organizations, industrial alliances and more to formulate platforms for multidisciplinary innovation.
- Implementation of pilot applications by encouraging telecom operators, Internet companies and other companies to participate in the construction of content development centers and application experience display centers.
- Strengthening the talent pool by supporting higher education institutions in establishing and improving relevant disciplines, fostering research collaborations between industry and universities, and nurturing multidisciplinary talent.
- Expansion of channels for international exchange and cooperation in the field of VR and accelerating international market development.
Importance of the action plan and the role of foreign investment
The action plan is the clearest sign yet that the Chinese government is banking on VR technology and the metaverse to become the next big thing in the digital space. As with other new technologies – such as autonomous driving – China wants to make sure it doesn’t catch up to other countries to build a domestic industry.
In general, one of the key goals of the Chinese government for the coming decades is to achieve technological self-sufficiency. This was a core tenant of the 20th Report of the Congress Partywhich sets the overarching policy agenda for the period up to 2027.
For this reason, the Chinese government will want to ensure that the domestic industry is not dependent on foreign technology and has sufficient capacity if, sooner or later, people of the future will actually spend a lot of time in virtual worlds in the Metaverse independent of other countries. This will not only help support the economy through the development of a potentially lucrative and high-growth industry, but will also put Chinese regulators in a better position to shape the industry’s development and ensure it complies with Chinese laws and regulations .
However, this does not mean that China’s VR industry and Metaverse will be limited to domestic players. China has long aligned its foreign investment policy with its core development and industrial goals. That Catalog of Eligible Sectors for Foreign Investments (2022 Version) actively encourages foreign investor participation in several areas related to Metaverse technology, including:
- R&D and manufacturing of VR, AR and MR devices
- Development and manufacture of image sensors (digital cameras, digital cameras, 3D sensors, lidar, millimeter wave radar, etc.) for fifth-generation mobile terminals (mobile phones, automobiles, drones, VR, advanced displays, etc.). ) […]
- Vocational and qualification services based on VR or AR devices”.
In addition, the action plan directly promotes international cooperation in the field of VR technology. As this plan serves as the first guideline for the development of China’s VR and metaverse industry, we expect more focused policy documents for different aspects of the industry, which may include more guidelines for foreign company participation.
China Briefing is written and produced by Dezan Shira & Associates. The practice has been assisting foreign investors in China and has been doing so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen and Hong Kong. Please contact the company for support in China at firstname.lastname@example.org.
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