Alibaba leads China’s drive to establish leadership in blockchain technology

By Staff Writer

Chinese e-commerce giant Alibaba has filed more than 10 per cent of the world’s patent applications for blockchain in a sign of China’s ambitions to dominate the next generation technology in uses beyond cryptocurrencies such as Bitcoin.

In total, China filed more patent applications than the U.S. last year, with technology companies such as Tencent and Baidu (which along with Alibaba are known as BAT) accounting for 56% of the worldwide total of 406, according to data collected by Thomson Reuters.

Patent applications from the U.S. came a distant second at 22%. The U.S. still has the largest number of cumulative applications, but on an annual basis, China is in the lead, showing the Chinese companies are keen to exploit blockchain

There are increasingly large number of blockchain applications already being rolled out, from clamping down on counterfeit food products to cross-border payments, laying to rest concerns that the technology has no real use cases.

Although China bans cryptocurrency deals, Alibaba has been expanding its blockchain-related businesses with the development of different applications, positioning itself as a global leader in the field.

Cross-border Remittance

During the launch of the company’s blockchain-based remittance service in Hong Kong in June, Alibaba founder Jack Ma said: “Blockchain technology can help overcome the challenges of security, sustainability and inclusion…It could change our world in more ways than people can imagine.”

The remittance service, operated by Ant Financial and its Philippine counterpart GCash, promises to facilitate cheaper and faster transfer of money internationally. It also allows senders and receivers to track the money transfers in real time every step of the way. Such blockchain applications are seen as having huge potential in Asia, where there is a large population of migrant workers who remit money home regularly, often bearing the brunt of the high fees that banks charge them.

Food products

Alibaba’s payment subsidiary Ant Financial and Alipay last week announced a partnership with the municipal government in Wuchang, in northeastern Heilongjiang Province, to use blockchain to ensure the authenticity of rice produced there. Alibaba alone filed 43 blockchain-related patents in 2017, some of which are still awaiting approval, and Tencent filed 11.

From Sept. 30, every packet of Wuchang rice on sale at a flagship store on Alibaba’s Tmall platform will be tagged with a QR code. By scanning the code using the Alipay app, customers will be able to track shipments and access related information including where it was harvested and the type of seed used. The new system will also cut delivery time.

The region is well-known for its high-quality rice, but in recent years, counterfeit versions have flooded the market, hitting the livelihoods of farmers and the credibility of the local government.

The e-commerce company has also teamed up with accountancy firm PwC, Australian health supplements company Blackmores and New Zealand dairy producer Fonterra, as well as postal services in two countries to develop blockchain-based tracking systems to reduce food fraud.

Healthcare

Alibaba is also exploring the potential of health care, having partnered with the city of Changzhou in eastern China to secure medical treatment data over blockchain. This allows authorized doctors instant access to patients’ medical histories.

Tax evasion

Other technology companies are also jumping into the blockchain bandwagon. Tencent has started a pilot project with the city of Shenzhen to develop an electric invoice system called Fapiao that employs blockchain. Using its social media app WeChat, the system enables residents to trace invoices and prevent falsification. The project will subsequently be explore prevention of tax evasion.

Media

Earlier in April, Baidu launched a blockchain-related photo storage service Totem, aimed at protecting the copyright of individual photographers and photo agencies. Photos are recorded with time stamps, which are linked to photographers’ profiles. Baidu’s artificial intelligence system scans each picture, so that it gives exclusive rights to the user only if the same picture does not already exist in its system.

Digital currencies

The People’s Bank of China (PBOC) is also quite eager to experiment with blockchain, most notably in applications related to digital currencies. PBOC and its subsidiaries has filed for 68 patents, more than twice the 33 requested by Bank of America, according to a report by IPRdaily, a Chinese website dedicated to intellectual property news, and incoPat, an innovation research indexing center.

Outside of China and the U.S., Japan and the U.K. are the only two countries to have more than one company with blockchain patents. Japan has five and the U.K. two.

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