With a new proactive government and a population in love with new technologies, China is pulling all the stops in virtual reality. So much so, in fact, that experts believe it will soon lead the industry.

A leader in the making

The US still dominates augmented and virtual reality industries, but China has been growing exponentially in that domain since 2013. According to several studies, this growth could allow it to become the industry’s world leader by 2022.

If we combine China with other important countries in the region, Asia could generate approximately half of the global AR/VR sales revenue in five years,” according to consulting firm Digi-Capital. In a report on the subject, the firm provides two reasons for this: China is a huge smartphone consumer (its iPhone sales exceeded the US’s in 2015) and represents 40% of global e-commerce – an industry quickly expanding its AR/VR use.

Rénmín Ribao (“The People’s Daily” in English) – the Chinese Communist Party’s official newspaper –  agrees. According to a Beijing think tank, the VR market should exceed 8.3 billion dollars by 2020, the equivalent of 35% globally. “VR is used in a wide range of fields, such as the military, aerospace, aeronautics, equipment manufacturing, medicine, education, tourism, e-commerce,” according to the newspaper. It goes on to say that the government “pays particular attention to the technological advancement of China” in this area, having established a “development strategy focused on innovation” in 2016 focused on research and startups.

A proactive government

The Chinese government, already proactive in all domains touching on new technologies, is focusing on boosting VR and AR use in all economic fields. In the future, it will combine the two under the name “XR,” or “extended reality.” “VR/AR is literally – and officially – considered a national priority,” Annika Steiber, CEO of Management Insights S.A., a consulting firm in “corporate innovation“, told Forbes.

President Xi Jiping’s five-year plan, launched in 2016, thus includes virtual reality as a “growth factor” along with AI, and aims to create an “industrial ecosystem” combining both public and private actors. The government has spurred the creation of several research and development laboratories. It’s also launching a project to build “VR Cities.” These would house companies specialized in AR and VR working to integrate these technologies in all areas of daily life: health care, education, public services, and entertainment.

With this kind of political and financial support from the state, dozens of Chinese startups and BATX (the Asian equivalent of GAFAM in the West) have multiplied their VR and AR projects. That’s how smartphone manufacturer Xiaomi designs VR headsets, “Mi VR.” Asian online commerce leader Alibaba is developing a VR e-commerce service, via the “Buy +” headset, which allows users to visualize a product from every angle in an immersive world. On its end, Internet giant Tencent is investing in the creation of virtual reality films and is also developing its own headsets.

The Chinese seem to have fallen in love with virtual reality and augmented reality. There are already more than 3,000 VR arcades throughout the country,” Annika Steiber says. “VR/AR mania” is such that the “Oriental Science Fiction Valley,” a huge VR amusement park, recently opened in Guiyang, the capital of Guizhou province. The city of Guangzhou also inaugurated a VR zoo in early 2018. It doesn’t contain any animals, but visitors are invited to discover them by donning headsets.

The Chinese are futurebound

Paloma Bouteleux, a designer and entrepreneur specialized in extended reality, has just ended an eight-year stint in Shanghai where her startup, Mira Mira, was based. “As long as AR/VR is a development priority, everything will be easy for entrepreneurs, thanks to huge innovations funds,” she says.

It’s really booming over there,” the artist says. “The Chinese are starting from scratch after years when everything was closed off to them. They want to advance toward the future and they’re not afraid of progress. They are keen on new technologies, so they’re getting into AR/VR the same way they got into AI and other technologies: without looking back. Meanwhile, in Europe, we’re still wondering about the risks of virtual reality.”

If China seems more “ready” than the West to use VR and AR in everyday life, that’s also because the Chinese are “hyper-connected,” Paloma says. “The Chinese spend the majority of their time on their cell phones. They do everything on them: communicate, shop, take and share pictures, etc. So when you propose they use them to enhance reality or dive into a virtual universe – to, for example, watch a VR concert and comment with their community – they don’t hesitate for a second. It’s already a habit.”