I arrived in Shanghai aware that China had upended the world of consuming and spending, with services like 30 minute guaranteed delivery of everything from live Alaskan King Crab (picture that on the back of a motorbike speeding along a sidewalk in the French Concession) to a bag of spring onions. Yet, because my daughter has been living here this year, I’m also well aware of the technological limitations she’s faced using China’s ubiquitous Wechat and Alipay, which the grandad smoking on the sidewalk and the fintech analyst living in a Pudong highrise use to pay for most goods and services. These financial transactions aren’t always seamless. Most stores and kiosks have QR codes protected by Chinese Saran Wrap hanging in front of the cash register, so buyers can scan the payee information with their phones as they wait in line. Usually, payment is a breeze, but every fourth or fifth customer, it seems, has to pass their phone to the clerk for some impatient app juggling while people waiting in line shift impatiently. Yesterday I stood in a thick crowd to board a high speed train when a nearby woman thrust her phone into the air, jabbing it higher and further, moving here and there until finally she snagged enough signal to download her ticket.
Problems are compounded for foreigners. My daughter doesn’t have a Chinese bank account, for various logistical reasons, and can only take advantage of some of Wechat’s payment offers, even though she uses a Chinese phone. I pay in cash most of the time, which feels archaic even outside of Shanghai. When I ask to change an airline ticket, I’m told the refund can only be made to a Chinese credit card — I just let that $50 go. There is mistrust built into the system, especially when it comes to foreigners.
That makes urban China a perfect storm for blockchain breakthroughs! Chinese innovators are among the most heavily invested in blockchain technology these days. The automobile company Wanxiang recently announced a 30 billion dollar investment over the next seven years in blockchain for smart cities. Wanxiang is building a massive lab in Hangchou, an hour by high speed train from Shanghai, to promote blockchain innovations. That’s on top of a large venture fund focused on blockchain tech. It’s a natural step for an auto company that’s facing a future of self-driving cars and DAO’s. Clearly, China is poised for liberation by blockchain. Whether or not the state will be able to shape the unknown forces blockchain will unleash is far from certain. Already, the government has banned ICOs.
Still, given the country’s rapid evolution into a mobile payment and banking economy, and the scale at which business takes place here, all eyes should be on China, particularly Shanghai.