The Chinese mining hardware industry has just received a major financial injection with a huge investment from one of China’s oldest and largest information and communications technology (ICT) company. According to a statement published on March 9th, Zhongjia Bochuang (ZJBC), a Chinese ICT company listed in Shenzhen with a $900 million market cap, has entered into a partnership with MicroBT. Under the partnership, ZJBC plans to invest up to 1 billion yuan, or around $155 million, in MicroBT’s WhatsMiner Bitcoin mining equipment.

However, the company won’t invest the whole $155 million into the Shenzhen-listed manufacturer at once. The partnership conditions MicroBT to supply the agreed amount of WhatsMiners to ZJBC and give the company priority when it comes to purchasing more of its products. During the first year of the partnership, at least 20,000 units are set to be delivered to ZJBC. The first batch of miners is set to be delivered in May this year, consisting of at least 2,000 units. 

Both parties have also agreed to establish a high-level communication system and organize discussions and seminar to ensure smooth cooperation. The two companies will jointly work on developing relevant industry applications in the fields of artificial intelligence (AI), edge computing, 5G microbase stations, and blockchain technology. In the future, MicroBT and ZJBC are set to integrate more of their resources and innovation models to broaden the field of cooperation and enhance their social influence over the crypto and blockchain industry. 

This isn’t ZJBC’s first foray into the crypto industry. In an official response to shareholder questions posted on the Shenzhen Stock Exchange back in 2019, the company said its chairman, Wu Ying, was one of the main investors in MicroBT. At the time, company representatives also revealed that ZJBC has been involved in Bitcoin mining since 2018, with most of its farms located in the Chinese Sichuan province. 

During 2018, the company reportedly brought in over 50 million yuan, or around $7.6 million, in revenue from BTC mining alone. The company’s 2018 revenue breakdown showed that around 2.76% of the income posted by its Changshi subsidiary came from mining farm businesses. Data from 2020 showed that during the first half of the year, Changshi brought in $92 million in revenue to ZJBC. The subsidiary is also responsible for a large portion of ZJBC’s cash reserves, which stood at around $112 million last summer. 

And while ZJBC isn’t the first Chinese company to invest in cryptocurrencies, both directly and indirectly, it is one of a handful of companies with state-backing that has been open about its digital asset dealings. ZJBC’s corporate filing with the Shenzhen Stock Exchange showed that just under 3% of its equity is connected to Chinese state capital, showing a direct connection between the Chinese government and Bitcoin mining. Despite the country heavily investing in blockchain development, it has been cracking down on cryptocurrency ownership ahead of the planned release of its digital national currency, the DCEP.