If you've dared to step inside an internet bar anywhere in China, you may have immediately realized two things: it is easy to inhale the second-hand smoke equivalent of an entire Zhongnanhai cigarette, and kids and adults are more than willing to spend bleary-eyed days playing fantasy dragon-slaying games and chatting online. Whether they will take to chat-based fantasy worlds like Second Life or its Chinese equivalent HiPiHi is not yet clear. As Adam Hsu and I wrote in this month's That's Beijing cover feature, HiPiHi claims to have 30,000 registered users. But where most of those users are remains a mystery; most of our explorations around the virtual temples and gardens turned up only a handful of avatars at a time. [UPDATE: Anding Zhang of HiPiHi emails in: "We have about 500 active users currently and concurrent online number is averagely about 30."] Still, HiPiHi and its Chinese brethren are betting big that if they build it, users will come. "We could be the leader," one HiPiHi employee told us.

But Linden Labs, the creators of Second Life, the world's most popular virtual world, have other ideas. The company have recently set up a Beijing office. China's very real virtual world contest is getting hotter.

Is a Second Life China version on its way? And what chances does it have? As Redline China writes:

The office opening is created speculations of Second Life's possible entry to China. However, despite its global name recognition, Redline China believes Linden Lab is likely to face various difficulties in China such as government regulation, low user awareness and lack of marketing and distribution channels. In addition, the launch of Chinese virtual worlds such as Hipihi, Uonenet and Noviking will intensify the competition in the virtual world market in China.

Currently, Second Life only counts about 5000 active users from the mainland.

As we discuss in the article, virtual worlds are not child's play. Major companies like Intel and Cisco have taken an interest in HiPiHi, which has already been in talks with Linden Labs about cross-platform cooperation. Google's is reportedly building their own virtual world. And in China, the government sees the potential of virtual worlds as a new economic force: not only can they support (still underdeveloped) virtual economies (the first person to become a real life millionaire by selling real estate in Second Life is a Chinese woman), but they can be used to help conduct business in real life, such as Alibaba-style sales of goods from Chinese factories directly to buyers overseas. The CEO of Beijing's Cyber Recreation District, a government-sponsored virtual business and entertainment platform, says the project could generate some 10,000 jobs while reducing pollution created by real world travel.

On that note, another important point: consider the state of affairs in China's cities, from air quality to unemployment to housing to transportation (to heck, internet cafes themselves), and you begin to see why people in China might want to spend hours flying around Second Life's and HiPiHi's lush, playful virtual worlds. As Paul Denlinger writes

The Internet cafe today in China is what gin and beer was to England’s working class in the mid-19th century when Karl Marx was writing Das Kapital about the evils of class exploitation.

Ironically, the internet cafe also sometimes feels like a sweatshop itself. Even more reason to escape to a virtual Beijing.

Read about my own escapist adventure in Second Life, and an interview with Second Life expert Hamlet Au.

And don't forget to check out Michael Armstrong's piece on social networking and Michael Donohue's article on dragon-slaying games (and the Chinese "gold miners" that play these games for other people).

Links and Sources
Boxxet.com: Second Life Reported to Open Beijing Office
The China Vortex: Digging Deeper About China's Internet Usage Data
Linden Labs
HiPiHi