China VR Industry On Steady Path To Reality

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China VR Industry On Steady Path To Reality
November 12, 2018
A visitor wears a VR, or virtual reality, device  during the First China International Import Expo in Shanghai. Photo: AFP

 

Still in its infancy, and amid private-sector uncertainties about government support, the country is all-in on immersive technologies.

 

Chinese Internet giant Tencent is reportedly “seriously considering” bringing virtual reality (VR) to its “everything app” WeChat, though it has not provided any further details.

 

The announcement, made by Tencent founder Ma Huateng (aka Pony Ma) on the first day of the 2018 Wuzhen International Internet Conference on Wednesday, is significant because of the commanding presence of WeChat on the Chinese Internet. According to the website Statista, Tencent’s WeChat had more than a billion monthly active users in the second quarter of 2018.

 

Tencent first ventured into the world of VR with the release of an Android-based video-gaming console, the MiniStation, in late 2015. The device allows users to connect to computer monitors and TV screens through an HDMI cable and play games wirelessly via their Android phones.

 

The company was following the lead of the US tech firm Oculus VR’s Rift headset, which pioneered and popularized immersive gaming a year earlier.

 

But there is far more to VR than the world of Steven Spielberg’s Ready Player One, in which VR has supplanted the smartphone. Research in China, as is the case in Japan, the United States and elsewhere, is focused on augmented reality (AR), virtual reality (VR) and mixed reality (MR).

 

To clarify, AR adds digital elements, usually to a smartphone live-view camera, which is used in the global phenomenon Pokemon Go. VR shuts out the real world, taking users into a fully immersive “other world,” while MR combines the two. The Franklin Institute cites Microsoft’s HoloLens – a head-mounted lens device that Microsoft claims can do almost anything – as one of the best examples of MR.

 

This amounts to a high-stakes game, and 2016 was a hype-busting year that saw 90% of China’s AR/VR startups play the wrong cards, folding or going bust, according to media reports. But China appears to be doubling down.

 

VR theme parks

Last April, for example, saw the opening of China’s first VR theme park, “Oriental Science Fiction Valley,” backed by about US$500 million in investment in Guiyang, capital of Guizhou province.

 

If this sounds strange, it needs to be considered that the Communist Party of China – and President Xi Jinping himself – is very interested in AR/VR. Odd things start to happen when the party gets involved in anything and begins to provide funding incentives for it.

 

Consider this, for example. The government is already trialing some VR applications. One, as Radio Free Asia has reported, involved trials of a VR system that tested the loyalty of CPC members at a newly opened Party Education Center in the northeastern province of Shandong. Details are sketchy but “VR ideological games” allegedly quizzed party members on Xi’s “Chinese Dream.”

 

In short, research into AR/VR research has steadfast government-level support. Support for immersive technology was prominent in the 2016-2020 Five-Year Plan, while funding for “Made in China 2025,” to which support for local-grown technologies is key, will likely exceed $1.5 billion, according to reports.

 

Venture Beat stated: “National competitions are regularly held along with streams of subsidies, incentive schemes, and support policies that are offered by a bevy of government stakeholders including the State Council, Ministry of Industry and Information, the Ministry of Science and Technology, and the Ministry of Education.”

 

All the same, it will be China’s private sector that will lead the charge into the future, which perhaps explains Party Chairman Xi’s repeated recent claims to support it. Just a week ago, at a symposium with private entrepreneurs, Xi said, “All private companies and private entrepreneurs should feel totally reassured and devote themselves to seeking development,” state media reported. “Private enterprises and private entrepreneurs belong to our own family.”

 

State support

In another recent comment reported in state media, Xi emphasized that the party would “unwaveringly” encourage, support, guide and protect the development of the non-public sector.

 

Such statements can be interpreted as reassuring and worrying in equal measure. What exactly is meant by CPC “guidance” of the private sector, for example? It is a question that, at the very least, needs to be considered in light of the fact that all private companies in China are required by law to host a party unit.

 

As one concerned foreign business owner in China told Reuters last year: “Once it [the party] is part of the governance, they have direct rights.”

 

But the private sector will push ahead, and often with government funding. Most of these startups and companies devoted to AR/VR research are basically unknown outside the borders of China.

 

One example of them, as technology-focused website Technode recently reported, is the online education arm of Taiwan-based HTC VIVE, VIVEDU, which is focused on the China market and has received backing from the southern Chinese tech-hub city of Shenzhen. It has created a VR education solution that allows students in various locations to gather together and learn in a virtual classroom.

 

More obvious applications for VR are health care for those in remote locations and industrial design and manufacturing, areas in which China has largely been focusing its research since as early as 1995. This was confirmed by an associate professor, Weng Dongdong, at the Center for Research on Optoelectronics, Information Technology and Color Engineering at the Beijing Institute of Technology in an interview with The Daily Telegraph in 2015.

 

Meanwhile, as one head of a US-based digital consultancy puts it, “Chinese people seem to be falling in love with virtual reality.” Annika Steiber goes on to point out: “More than 3,000 VR arcades [are] spread across the country, many of them placed in malls to draw walk-by traffic from shoppers.”

 

All this fevered research into AR/VR might appear to have implications for so-called big data. Perhaps it will. But with 98% of Chinese accessing China’s ring-fenced “intranet” via mobile devices, according to Statista, and using services provided by companies that host CPC cells, the country has all the big data it needs. The only caveat is that China continues to be troubled by a relatively low Internet penetration rate, at just 57%, so the real challenge is to continue lifting its people out of poverty and to expand mobile-Internet coverage.

 

5G uncertainties

Meanwhile, it has to be added that the most ambitious announcements by the heads of China’s big three Internet players, Baidu, Alibaba and Tencent, referred to by the acronym BAT, are sometimes based on even more ambitious claims made about the coming fifth-generation (5G) revolution. The hugely complex technicalities of the global switch from 4G to 5G are well summed up – in short, don’t hold your breath and don’t buy all the hype – in an article titled “5G is real” in PC magazine.

 

In other words, when Tencent’s Pony Ma made his announcement about VR and smartphones with the words, “I hear that China Telecom’s pilot 5G service here supports downloading as fast as 1.7G [gigabits] per second, faster than optical fiber,” he was very much hedging his bets by keeping it as vague as possible. Pilot tests with 5G and the probably not-so-near-future countrywide rollout of the new technology are two different things.

 

It should also be added that such pilot tests are currently being undertaken over very short distances – usually a kilometer or less – which means little in the way of what is known as latency. What happens to the speed of 5G when it rolls out in scale is another question.

 

Moreover, as one Taipei-based tech analyst told Asia Times: “It took 4G about eight years (approximately 2007 to 2015) to go from hype and demos to being usable (by then there were plenty of handsets available and coverage [of] over 50% in most countries).”

 

In short, AR/VR research is in its infancy, as is 5G, and with the US and Japan ahead of China in terms of research, according to innumerable reports on the subject, it is too soon to tell whether there will be “winners and losers” in the global race to a virtual future.

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