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China’s 2021 internet sector in 5 snapshots, from tighter regulations to bumpy IPOs and shifting demographics
- China’s bitcoin crackdown is one of the major trends of 2021 identified in the 138-page report about the world’s largest technology and internet market
- Besides bitcoin, China has also placed data security and market dominance under tight regulatory scrutiny
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Bitcoin mining required so much energy that the sector would rank ninth among China’s 10 biggest carbon-emitting industrial urban centres by 2024, a dubious honour that explains why the Chinese government came down so hard this year to ban the creation of the largest cryptocurrency.
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The use of energy-sapping computers to solve cryptographic problems to create bitcoin – known as “mining” – is expected to generate 131 million metric tonnes of carbon dioxide by 2024, just behind the coal-mining city of Ordos in Inner Mongolia and ahead of the steel-producing hub of Handan in Shandong, according to the 2021 China Internet Report, citing data provided by the Cambridge Bitcoin Electricity Consumption Index.
The energy usage and carbon emissions by bitcoin mining explains the crackdown on the industry, coming “amid China’s growing green ambitions as it aims to reach peak emissions by 2030 and carbon neutrality by 2060,” according to the report by SCMP Research. “Though already on the decline before the crackdown, China still claimed 46 per cent of the world’s bitcoin mining, which consumes a great amount of electricity. The government is concerned that the volatility and speculative nature of bitcoin could also create disruptive spillovers into society.”
China’s cryptocurrency crackdown, which has caused bitcoin’s value to see-saw earlier this year, is one of the major trends of 2021 identified in the 138-page Pro Edition report about the world’s largest technology and internet market. The report chronicled the tightening regulations on multiple fronts that resulted in a bumpy road ahead for Chinese technology stock offers (IPOs), forcing companies to alter their overseas growth strategies and re-examine underserved segments because of demographic changes, with renewed focus on private-domain traffic.
China’s regulators fired the first salvo of their scrutiny on technology last November when they foiled the US$39 billion initial public offering by Ant Group – the affiliate of this newspaper’s owner Alibaba Group Holding – a mere 48 hours before shares were due to start trading in Shanghai and Hong Kong. Since then, dozens of regulations had been issued, and billions of yuan worth of penalties were meted out to scores of technology companies across a range of internet-related industries from fintech to gaming, ride hailing to meal delivery, and education.
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