The Application of Blockchain Technology in

E-government in China
Heng Hou
School of Information Management,
Sun Yat-sen University,
Guangzhou, China
[email protected]

Abstract—The purpose of this article is to discuss the (i.e., by appending information using cryptographic digital
application of blockchain technology in e-government, signatures) to represent the latest state of a blockchain.[3] It was
particularly in the Chinese context. Chancheng District, part of originally used to record historical transactions of encrypted
Foshan City in Guangdong Province, China, has undertaken a digital currencies such as Bitcoin.[4] At present, the application
project called “The Comprehensive Experimental Area of Big of blockchain technology has been extended to the Internet of
Data in Guangdong Province” since 2016. Promoting the Things, intelligent manufacturing, supply chain management,
application of blockchain technology in e-government is an digital asset transactions, and other fields.
essential part of this undertaking, which is the first use of
blockchain in government in China. Taking Chancheng’s project In 2016, the Chinese government published a white paper
as a case study, this article analyzes the framework, difficulties on the development and application of blockchain technology
and challenges of applying blockchain to e-government at in China that discussed the core technologies and typical
present, and discusses how blockchain technology can contribute applications of blockchain, put forward suggestions for
to the development of e-government and public services in technological development, and standardized the use of
China. This article considers the practical realities in China and blockchain in different sectors in China. The Chinese
discusses the application of blockchain technology in Chinese e- government has long been striving to promote the development
government, finding that blockchain technology can bring the of e-government by using information communication
following benefits: (1) improvements in the quality and quantity
technologies (ICT) in the public sector to accelerate
of government services, (2) greater transparency and
administrative transformation. The use of blockchain
accessibility of government information, (3) development of
information-sharing across different organizations, and (4)
technology in e-government systems is part of this
assistance in building an individual credit system in China. development; it is necessary to discuss the relevant key issues.
However, information security, cost and reliability are still major
problems in application. Thus, establishing a general application II. THE APPLICATION PROJECT OF BLOCKCHAIN
platform of blockchain technology and developing management TECHNOLOGY IN CHINESE E-GOVERNMENT
standards are crucial for promoting and applying blockchain in
e-government. Blockchain provides an effective way of making In 2016, Chancheng District (part of Foshan City in
government services more efficient, but standardizing the Guangdong Province, China), established the “Guangdong
management system, processes and responsibility for the Province Big Data Comprehensive Experimental Area.” The
application is necessary for its further promotion. This article, by Chancheng government collaborated with a software company
providing an analysis of the practice of blockchain in e- called 21ViaNet China Inc. to establish the first e-government
government in China, could serve as a foundation for further service platform using blockchain technology in China.
practical work and theoretical research in government services. Donghao LIU, Chief Executive of the Chancheng District
Party Committee, said that in order to develop informatization
Keywords— blockchain; e-government; public services; China construction, information security and credit guarantees are
essential. Fortunately, blockchain technology can have the
effect of ultimate proof. Therefore, Chancheng government has
I. INTRODUCTION built a next generation open-operation platform that is based
Blockchain technology, which was first proposed by on blockchain technology which will enhance mutual trust
Satoshi Nakamoto in 2008, has been the subject of much between government, enterprises and citizens.[5]
attention in many countries and different fields in recent years.
Although “Satoshi Nakamoto” proved to be a pseudonym and This project is based on the foundation of One-Stop
no one knows his actual identity, Nakamoto’s work is being Services in Chancheng Distict, which started in 2014 and set
used all around the world.[1] Generally, blockchain is defined up different government institutions so that citizens can apply
as a distributed ledger that maintains a continually growing list for multiple public services through the same platform instead
of publicly accessible records cryptographically secured from of searching and applying for different services on different
tampering and revision.[2] It is believed to create a persistent, platforms and at different institutions. According to the
immutable, and ever-growing public ledger that can be updated Strategic Cooperation Agreement, the application of

978-1-5090-2991-4/17/$31.00 ©2017 IEEE

blockchain technology in Chancheng’s e-government focuses providing each object a permanent digital identity. This system
on two goals: will provide each citizen with “individual credit” and a
verifiable digital identity, stored immutably in the blockchain
(1) Solving the problem of individual credit by building a platform. In this situation, government will rely on individual
digital identity system. Chancheng government believes that credit records rather than other conditions to provide public
using blockchain technology to preserve all system records of services, which will simplify bureaucratic processes and
changes and trading on a cloud system can verify the improve the speed and authority of government approval. It
provenance and authenticity of data during transmission.[6] In can also help to reduce administrative bias, ensuring everyone
this way, it is possible to establish a reliable personal identity is able to access public services equally.
system. The digital identity includes personal identity
authentication and digital signature functions and will provide
reliable identification of individuals as a basic part of One-Stop B. Developing the Individual Credit System
Services. In China, personal records are separately stored in different
systems. For example, education records and employment
(2) Disclosing reliable information related to people’s records are preserved in individual institutional archives, while
livelihood. At present, Chancheng government applies identification information and permanent registered records are
blockchain technology to food safety, using an application stored in the local Public Security Bureau. Other records,
called the Smart Farmers Market. It contracts with 73 farmers’ including marriage records, are held in the local Civil Affairs
markets, uploading and disclosing the products’ testing data Bureau. This fragmentation makes it challenging for
during their production, transportation and marketing individuals to collect all the necessary personal records when
processes, ensuring the quality and safety of the edible they need to apply for public services. Using blockchain
agricultural products. technology to establish an individual credit system means that
As shown above, Chancheng government applies all these personal records can be preserved in the same system
blockchain technology to solve problems of identity, credit, so that every individual will have a comprehensive digital
and information disclosure. And this project will be extended identity, including all of their personal records, which contains
to building an enterprises credit system and a blockchain-based reliable, authoritative personal information and cannot be
platform that includes enterprises, consumers and suppliers, so changed arbitrarily. The Chanchen District Government plans
that consumers can be informed of the background of to distribute individual digital identity cards, which will
enterprises, and enterprises can know more about the demands authorize citizens to use the blockchain-based public services
of consumers and the reliability of suppliers. It will also platform, and will provide them with access to their records
collaborate with high-tech companies to develop more and personal information. Accordingly, the government and
blockchain-based applications apply to different public other institutions will rely on the records in digital identity
services, including elder services clouds, healthcare, pensions, cards to make decisions. The long-term vision is that citizens
government performance, food safety and government will then value their individual credit, which will play an
divisions, all of which have close relationships with important role and not be able to be changed at random, and
individuals’ livelihood. try their best to maintain good credit. This will also benefit the
government’s governance and social harmony.
III. THE ADVANTAGES OF APPLYING BLOCKCHAIN
C. Strengthening the Government’s Credibility
TECHNOLOGY TO E-GOVERNMENT IN CHINA
The functions of government include economic
In China, e-government development is considered an management, market supervision, social management and
important component of the national informatization strategy. public service. Open government means that the information
Although a lot of money, technology, and human resources related to the public is made accessible to citizens, and
will be invested in this area, applying a new technology to individuals can supervise the government’s work. An open
government services is greatly complicated by the sheer size of government that relies on unchangeable information in a
the population and the complex demands on public services. blockchain system brings more than just convenience to the
The government sees blockchain as a potential solution to public. Transparency breeds trust, and when individuals can
these challenges, because blockchain itself is secure against trace the provenance of any particular information that impacts
online attacks, can be verified by anyone, and is resistant to their life, as in information related to food safety, they are
any attempt to tamper with its history.[7] It is hoped that more likely to have faith in it. Thus, by endorsing blockchain
blockchain can be used to help to set up individual accounts to technology, the government can strengthen their authority and
access government services and improve governance, an area credibility with the public, and thereby govern more
of high need due to the large migrant population in Chancheng effectively.
District. Moreover, blockchain-based platforms can be used to
give citizens access to reliable government information, which
can in turn strengthen the government’s credibility. D. Promoting the Integration of Resources
On the one hand, although China remains a unitary political
A. Improving the Quality of Government Services system, it is one of the most decentralized countries in the
world in terms of the resources and responsibilities assigned to
When using blockchain technology, any individual local governments.[8] This makes the integration of resources
certificates, material objects, property and personal records, from different governmental bodies extremely challenging.
and even public records, can be recorded on the same platform,
The hope is that blockchain technology can help solve this B. The Long-term Preservation of Blockchain Platform
challenge. Within the blockchain system, every transaction is Records
recorded, which makes it easy to trace the parties authorizing Blockchain technology has only recently begun to be used
transactions and understand scope of the transaction. It also for applications beyond crypto currency. While it has many
means that data can be more easily and safely transferred exciting potential uses, it does not guarantee reliability of
between different organizations, thus promoting the integration information and would have several limitations as a long-term
of information amongst different organizations. solution for preserving trustworthy digital records.[10] In a
On the other hand, the blockchain-based platform has high blockchain system, records as such (as opposed to their hashes)
scalability and it depends heavily upon a consensus would have to either reside in the blockchain or should be
mechanism. This means that government can set up different moved to a separate environment or system for long-term
enterprises that meet the conditions of the blockchain-based preservation. The question of where and how to store the
platform and select nodes that add to the chain through a records associated with the blockchain platform is a problem
consensus algorithm. By using a consensus mechanism, that must be solved if the blockchain system is applied.[11] In
government can build trust between different enterprises, Chancheng, the data in blockchain-based applications is stored
establish blockchain-based applications that can provide more in the cloud. The long-term preservation of this data is not
diversified public services, and the resources across different distinct, however. The records of public services platforms are
enterprises can be integrated into a single platform. Like the valuable evidence of governmental, economic, and social
Smart Farmers Market in Chancheng, each market that meets activities, and thus they should be transferred to the archives
the conditions can join in the chain, and provide testing and appropriately maintained for long-term preservation. If
information from their products. This will form a database of such records cannot be preserved appropriately, civil rights,
complete testing data of the edible agricultural products. legal evidence and social memory could be damaged
irretrievably.
Furthermore, when combined with the big data technology,
the enormous resources in the blockchain platform can be C. The Information Security of Blockchain Technology
mined for insights to improve government services delivery.
Blockchain aims to change the way that the authenticity of
records is established, from reliance on a trusted third party to
IV. THE DIFFICULTS OF APPLYING BLOCKCHAIN a system-based mode of establishing authenticity.[12] At
TECHNOLOGY TO E-GOVERNMENT IN CHINA present, the biggest danger actually comes not from system
vulnerabilities, but from blind trust in the blockchain on the
A. The Cost of Establishing a New Blockchain-based part of blockchain developers, lawmakers, law enforcement
Platform and the general public. This trust relies exclusively on the
In the case of e-government, the different strategies technology, rather than management, to make sure the system
regarding economic investment in science and technology is trusted and the records in the system are reliable.[12] It cannot
might represent not only a government’s attitude towards new be guaranteed that technology will never make a mistake,
technology and innovations (and possibly towards a new form however. And if the blockchain platform was widely used in e-
of public administration), but also various aspects of the government for systems that contain essential information, one
region’s context, such as economic abundance and mistake may lead to serious consequences.
technological resources. Different regions in China are distinct
from each other in the above areas, which largely explain the D. Management Responsibility of the Blockchain Platform
imbalance of e-government development across regions.[9] The The blockchain platform requires the cooperation of
establishment of a blockchain platform involves a number of multiple institutions. Taking the Smart Farmers Market from
different systems and organizations, and problems such as time Chancheng District as an example, we can see that different
and expense will hinder its construction. It may be easier for institutions provide the records at each stage from production
the developed regions of China to invest in the new application and transportation all the way to the point of sale. How to
of blockchain technology and improve e-government ensure the whole process will be recorded and maintained
development; in other regions, the government may find it is appropriately, and determining which institution should take
hard to justify the cost of this new platform, even though it will responsibility to manage the system and its records is a
benefit the local government in many areas. question that should be answered prior to establishing the
Furthermore, there are already different kinds of public system.
services platforms in China now, including the “Online
Services Hall,” among others. How to make full use of the V. THE SOLUTIONS OF APPLYING BLOCKCHAIN TECHNOLOGY
existing systems and how to avoid redundancy while TO E-GOVERNMENT IN CHINA
developing a new blockchain-based platform are just two
important issues that need to be further examined. Otherwise, A. Standardization
it may produce duplications with existing public services
The lack of a common blockchain platform and application
platforms, which would not only be wasteful, but could also
standard is one of the most important reasons why the initial
lead to confusion in providing public services and a
investment of time and money to develop an e-government
concomitant loss of trust in government.
blockchain platform is so high. Clarifying the basic concepts,
processes, and standards in the application of blockchain
technology in e-government in China can help to improve the market managers to actively cooperate with each other,
awareness of blockchain technology, unify the basic develop implement blockchain applications, and introduce innovative
platform and application programming interface, promote the solutions.[9] Therefore, the experience of the Chancheng
interoperability of multiple blockchain systems and perfect the government could be the first step in the development of
business processes required. This will reduce costs and blockchain-based public services. Chancheng’s experience
improve customer satisfaction, and also expand the field of reveals that blockchain technology can help the government
application so that both the developed and underdeveloped develop an individual credit system in society, not only for
regions in China will be able to apply blockchain technology to citizens but also for institutions, and thereby improve the
e-government platforms, and in turn narrow the gap among provision of services, governance, and government credibility.
these regions and promote public services in China. However, this will not be an easy goal to achieve. The
development of blockchain technology in e-government still
B. Collaboration needs discussion in different aspects; this technology offers a
Technology institutions need to consider not only the work new method for delivering and managing public services, and
involved in developing blockchain platforms, but also the work there remains a need to establish standards, deploy solid
required for their long-term operation. This means that prior to management systems and ensure adequate security to make
establishing blockchain platforms, governance institutions, sure the services and platform are reliable, authoritative and
technology organizations, archives and other involved supportive of long-term preservation.
institutions should participate in discussions about both start-
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