The number of firms in China with the word ‘blockchain’ in their name has exploded in the first six months of 2018, according to the South China Morning Post.
The information is based on government data gathered by qixin.com
According to this data, in 2017 there were 555 companies in China with the word qukualian in their names, while 3,078 companies registered such names between January and mid-July 2018.
‘Hangzhou Today Marriage Blockchain Technology’
‘Guangzhou Chinese Medicine Homeopathy Blockchain Technology’
‘Jiangsu Dragon Liquor Blockchain Trade’
Moreover, in the last 12 months 16,600 new companies in China have declared blockchain to be part of their business.
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This echoes a similar trend seen in the West recently. In some cases, unscrupulous businesses have sought to profit from the general enthusiasm for blockchain technology – the most widely-publicised example was New York-based soft drinks company Long Island Iced Tea Corp, which changed its name to Long Blockchain Corp and saw its share price dramatically jump despite the rebrand being entirely cosmetic. Other examples include a UK firm called On-line Plc changing its name to On-line Blockchain Plc, and a company called Bioptix changing its name to Riot Blockchain Inc.
Long Blockchain was eventually de-listed from the NASDAQ stock exchange and Riot Blockchain Inc had to deal with a class-action lawsuit.
South Korea was also reported to be investigating this phenomenon, but the authorities in that country chose not to reveal specific examples so as not to cause market instability.
4,000 names for blockchain
Research from the SCMP reveals that in the US there are currently 817 companies with blockchain-themed names and 335 in the UK. China has over 4,000.
To those aware of the history of the Chinese government with cryptocurrency this may seem strange – after all, most cryptocurreny-based activites were made illegal there a while ago – events are sometimes halted by police and many of the country’s biggest cryptocurrency-based companies have left.
However, local governments throughout the country have been encouraging the industry (the report names Shanghai, Shanxi, Henan, Guangzhou, Guiyang and Hangzhou) with financial incentives, and approximately 41 percent of all funded Chinese startups were somehow related to blockchain technology.
As we have reported in the past, China appears to be supportive of the industry as long as it can be controlled.