As the concept of metaverse continues to grip the global technology industry, local companies are scrambling to build a digital realm that comes with Chinese characteristics.

Unlike some foreign enterprises that focus on the entertainment uses of the metaverse, Chinese companies are prioritizing its industrial application and potential to advance industrial upgrade, experts said.

The industrial metaverse generally refers to a virtual world in which real machines and factories, buildings and cities, grids and transportation, and other industrial objects and systems are mirrored digitally with technologies such as virtual and augmented reality, they said.

Li Bohu, an academic at the Chinese Academy of Engineering, said the industrial metaverse was the talk of the town because it had become a new carrier for the integration of the digital and real economy.

"The industrial application of the metaverse can create a new mode of smart manufacturing that features interaction between the virtual and real worlds," Li said.

Software developers, for instance, will simulate every aspect of manufacturing operations in a digital twin factory, or the industrial metaverse, where engineers and designers worldwide can collaborate in real time, said Yu Jianing, co-author of the book Metaverse.

By simulating the feasibility of tasks in the industrial metaverse, problems can be identified, analyzed and quickly resolved. Operating costs can be greatly reduced and efficiency boosted when this is implemented in reality, Yu said.

Chinese internet giant Tencent, for example, is working with Ruitai Masteel New Materials Technology to build a digital twin factory that carries out simulation and virtual testing before processing real products.

The industrial metaverse is expected to drive the market size of global smart manufacturing to exceed $540 billion by 2025, with a compound growth rate of 15.35 percent from 2021 to 2025, according to market research company TrendForce.

The Chinese government, which is well aware of the trend, is moving quickly to roll out favorable policies. Last month, the Ministry of Industry and Information Technology and several other ministries jointly released a five-year plan (2022-26) to integrate virtual reality tech with industrial applications.

Though it did not explicitly mention the metaverse, the plan called for more efforts to create fundamental technologies that support immersive augmented reality, virtual reality and mixed reality experiences.

The plan aims to increase the market size of China's virtual reality industry to above 350 billion yuan ($50.1 billion) by 2026, by which time the government expects to have cultivated 100 enterprises with strong innovative ability and industrial influence.

The value of the virtual reality market in China exceeded 100 billion yuan in 2021, according to CCID Consulting.

At a recent conference on virtual reality in Nanchang, Jiangxi province, Vice-Minister of Industry and Information Technology Wang Jiangping said, "The ministry will seize the window of opportunity in the VR industry to promote its integration with the real economy."

China currently has more than 10,000 enterprises engaged in virtual reality and allied businesses, the ministry said.

He Chao, secretary-general of China Mobile Communications Association's metaverse industry committee, said China highly values the role of the metaverse in upgrading the real economy.

Controversies around the metaverse exist, but it is certain that Chinese companies will not miss out on the crucial technological shift it entails, He said.

Established tech companies such as Tencent, JD and Huawei, as well as some startups, are racing to explore applications of the industrial metaverse, which is still in its infancy, in sectors such as manufacturing, supply chain, construction, tourism and automobiles.

Hu Houkun, rotating chairman of Huawei Technologies, said that compared with consumer-oriented applications, the metaverse has far greater value in its industrial use.