The Chinese technology giants have already invested in a market that may be worth up to $8 trillion in the future.

The launch of a new metaverse research institute was announced in Shenzhen, South China's Guangdong Province, during the 2022 Global Metaverse Conference, which ran recently from November 10 to 11. From here, the institute will commit to accelerating innovation and support local policymakers, the Shanghai Securities News reported on Thursday.

The institute will support cooperation platforms for local enterprise and boost industry innovation and application of projects, said the report. The institute aims to closely follow industry trends and make efforts to develop technologies, pursue application scenarios and boost research and development (R&D) results, in order to support the country's digitalisation construction and its metaverse industry.

According to China's iiMedia Research Institute, cloud computing, blockchain and virtual and augmented reality (AR and VR) are the three supportive technologies of the metaverse industry. iiMedia estimated that the market scale of the three technologies in China will surpass 300 billion yuan ($41.38 billion), 1 trillion yuan and 80 billion yuan in 2023.

Aside from Shenzhen, various major cities including Shanghai and Beijing have announced efforts to accelerate the development of the metaverse industry and have issued relevant documents.

The Shanghai Municipal Commission of Economy and Informatization issued a development outline in December 2021 for the local electronic information industry for the 14th Five Year Plan period 2021-25, which aims to enhance the R&D of basic technologies for the metaverse and AR and VR equipment.

The government of Beijing's Tongzhou district issued a document in August 2022 on the need to develop or import applied metaverse technology covering various fields such as culture, tourism, business and city services.

Apart from cryptocurrencies, VR and AR are the other two most important elements in the development of the metaverse in China. 6 of China's tech giants (Baidu Inc, Alibaba, Bytedeance, Tencent, etc.) have made VR/AR to the top 10 girls globally in the past two years.

Baidu was the first Chinese tech company to launch a metaverse app; The Land of Hope, in December 2021. This app was the first signal that China had stepped into the global metaverse market. As for Tencent, the global-leading internet and technology company plans to launch the Super Digital Scenario Co-development Project, including, the blurring of boundaries between real and virtual worlds through expanded content, social interactions, and increasing offline activities. This project will provide players with immersive game experiences in offline activities, with the aim of merging the real and virtual worlds in the direction of the metaverse.

From the research of Newsroom (2021), 78% of Chinese participants are interested in interacting within gaming worlds, in contrast with 57% in the US and 47% in the UK. Moreover, Xing Chen and Leo Tian Yi are two virtual idols in China. Their social channels have garnered over 5.28 million followers and 227,000 followers respectively. The Chinese Gen Z are more likely to interact with these digital humans online.

From a governmental perspective, several Chinese local governments have also started to include the metaverse in their work. A document called 'Measures for Promoting the Innovation and Development of the Metaverse' was issued by the Guangzhou Huangpu District and Guangzhou Development Zone for the Guangdong – Hong Kong – Macao Greater Bay Area.