China’s embrace of innovation as well as its own central bank issued digital currency, the Digital Currency Electronic Payment (DC/EP), will see the Asian giant reap a US$440 bln reward over the next decade with an estimated 11.4 million jobs enhanced, PwC economists have forecasted.
Of the expected blockchain applications boost to global gross domestic product (GDP) by $1.76 tln (i.e. 1.4% of global GDP) by 2030, China’s projected reward over the period represents a potential 1.7% boost to its GDP as blockchain makes the biggest impact on Asia’s economy with China, India and Japan driving adoption in the region, their Time for trust: The trillion-dollar reasons to rethink blockchain report states.
“There is an opportunity for all; our economists expect the majority of businesses to be using the technology in some form by 2025. Once it has hit the mainstream, the economic benefits are expected to rise steeply,” PwC economists state based on their assessment of how the technology is currently being used to gauge its potential to create value across every industry, from healthcare, government and public services, to manufacturing, finance, logistics and retail.
Realizing this projection with a sustained effort in this regard could be a plus for China whose current trade recovery – the likely impact of the coronavirus pandemic on the global economy notwithstanding – has been praised as the only major economy to grow this year during the ongoing annual meeting of the International Monetary Fund (IMF) and the Board of Governors of the World Bank Group where they predicted that global GDP will grow 5.2% in 2021, down from an earlier estimate of 5.4%.
Imports into China hit their highest dollar amount in September up 13.2% year on year to $203 bln to record its biggest jump in 2020 though the IMF expects the global economy to contract by 4.4% in 2020, 0.8% point above the June forecast, according to its latest World Economic Outlook.
While China will gain the highest potential net benefit with blockchain according to PwC, the US will follow with an expected rake in of US$407 bln over the same period through its vast supply chains as well as the social and ethical demands of consumers. Blockchain is expected to enhance 2.2 million jobs in the U.S. by 2030 as Germany, Japan, U.K., India and France are each estimated to benefit by more than $50 billion with 889,000; 617,000; 695,000; 3.2 million and 510,000 jobs created respectively.
The five key application areas of blockchain with potential to generate economic value identified in the report are product tracking and tracing ($962 bln), financial services and payments ($433 bln), identity security and credentials ($224 bln), contracts and dispute resolution ($73 bln), customer engagement and reward programs ($54 bln) while public administration, education and health care sectors are expected to benefit the most (with a projected $574 bln increase by 2030) by “capitalizing on the efficiencies blockchain brings to the world of identity and credentials,” the report said.
Chinese President Xi Jinping supposedly endorsed blockchain last year as his administration seems to be warming up to cease the opportunity emerging technologies offer. During his Tuesday visit to the Guangdong city which has reportedly attracted more financial investment of late and provided the young population with opportunities, he stressed on the need for independent innovation of companies for China to “take the road of self-reliance on a higher level.”