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Chinese state newspaper warns of metaverse 'fever' after Meta announces major job cuts

China's top economic newspaper cautioned against "feverishly" jumping on the metaverse bandwagon as local governments and enterprises flock to the booming industry, even as Facebook owner Meta Platforms announces job cuts this week.

"The metaverse industry sounds promising, but it may not fit every region. Be wary of feverishly following suit and betting big on it while detached from reality", said an article by the Economic Daily, a newspaper run by the State Council and overseen by the Chinese Communist Party's central propaganda department.

The article, which urged "prudence when expanding into the metaverse industry", said more than 30 local governments in China have issued policies in support of metaverse development, and that more than 18 metaverse-specific industrial parks have been established.

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The Economic Daily compared it to the fervour surrounding the new energy industry years ago, which resulted in an overcapacity of solar and wind power generation in many areas. On its official website, the newspaper defines itself as "an important channel of public opinion for the CCP Central Committee and the State Council to guide economic work".

The article did not mention Meta directly.

Since last year, authorities in several major cities have unveiled plans to support the development of the metaverse, including Shanghai, Hangzhou and Wuhan, the capital city of central Hubei province.

But some have grown more cautious on certain metaverse elements. When updating its industrial metaverse plan for 2022 to 2025, the Wuhan government removed a line about NFTs, or non-fungible tokens.

The original draft plan, published in August, stated that authorities would strengthen efforts to draw business and investment to the city in areas such as NFTs. However, as cryptocurrency trading and mining are banned in China, state-run organisations are trying to advance blockchain development without the involvement of such tokens.

China's state media has maintained a wary tone on the metaverse.

People's Daily, the Communist Party's mouthpiece, said in November that people need to "stay rational in understanding the current metaverse mania". A month later, the paper said anyone engaged in the sale of virtual properties risked "getting burned".

Last November, Economic Daily also warned against speculative trading in metaverse concept stocks, sending share prices tumbling before they rebounded. In a commentary, the paper said retail traders should avoid rushing to invest in an "immature" concept like the metaverse, since it was something that required long-term investment and development.

Overseas, the metaverse industry is also facing a bumpy road. Meta, the Facebook owner that changed its name last year to show its commitment to the futuristic concept, is laying off thousands of workers. Chief executive Mark Zuckerberg told executives on Tuesday that he was accountable for its missteps, and that his over-optimism about growth had led to overstaffing, the Wall Street Journal reported.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.