Chinese entrepreneurs registered 714 blockchain firms in China this month, resulting in a total of 26,089 such companies operating in the country.

According to cryptocurrency data firm LongHash on Jan. 26, the total number of blockchain firms registered in China is 79,556, while 57,257 Chinese blockchain firms also lost their legal status or had their licenses revoked.

From 2009–17, the annual number of founded blockchain firms remained relatively static, before a notable jump upward in 2018.

While it remains to be seen whether funding remains stable for the remaining 11 months of 2020, if the average monthly rate of founded blockchain firms remains the same as in January, China would see 8,565 new blockchain-related companies this year.

Blockchain firms registered in China per year. Source: LongHash

As per the map below, the lion’s share, 28.5%, of blockchain firms in China are in the province of Guangdong, which is home to the major city of Shenzhen and shares a border with Hong Kong. Both of these cities are known for their tech hubs and initiatives to apply blockchain in civil administration and other aspects of municipal development.

Distribution of registered blockchain firms in China. Source: LongHash

Average funding remains low

The data also reveals that over 46% of Chinese blockchain firms have no more than 5,000 yuan of registered capital, which is equivalent to just under $721. Furthermore, 8.32% of firms have between $721 and $1,442, 26% have between $1,442 and $7,208, while 9.17% of firms have $7,208 or more.

This apparent lack of capital in the Chinese blockchain space is in line with the results of a recent joint study by China’s government-run financial information and media firm Xinhua and financial data platform Rhino Data. The study states that investment and financing deals in the Chinese blockchain space dropped over 40% in 2019.

China’s official blockchain development efforts

As Cointelegraph reported in October 2019, Chinese President Xi Jinping called for the country to accelerate its adoption of blockchain technology:

“We must take blockchain as an important breakthrough for independent innovation of core technologies, clarify the main directions, increase investment, focus on a number of key technologies, and accelerate the development of blockchain and industrial innovation.”

After the announcement, reports suggested that blockchain technology was rapidly maturing in China as it is increasingly implemented in government projects. The consequences of Jinping’s talk are far-reaching, as some noticed that reports criticizing blockchain technology are now banned from local media.