Beijing plans to spend trillions of dollars to promote chip research and development:
In the face of the increasingly tight chip blockade imposed by Western countries on China, it is reported that the Chinese authorities are ready to spend trillions of dollars in this field and start a race with the United States and Europe. However, past lessons show that this "national power" may ultimately be just a repetition of a large-scale "rotten building".
According to Reuters, three sources from Chinese mainland said Beijing plans to allocate $143 billion (more than one trillion yuan) over the next five years to promote China's chip research and development, achieve independence and free itself from Western repression.
The funds will be used to provide tax incentives and subsidies to chip manufacturers and research and development activities, the sources said.
According to Reuters, three sources from Chinese mainland said Beijing plans to allocate $143 billion (more than one trillion yuan) over the next five years to promote China's chip research and development, achieve independence and free itself from Western repression.
The funds will be used to provide tax incentives and subsidies to chip manufacturers and research and development activities, the sources said.
Reuters quoted analysts as saying that Beijing's move shows that the Chinese government is taking a more direct approach to shaping the future of China's chip industry. With the rapid growth of chip demand, this area is becoming a geopolitical hotspot. Beijing sees competition in this area as the most important part of China's technological competition with the West.
Two Reuters sources revealed that the plan will be implemented as early as the first quarter of next year. They said most of the program's money would be used to subsidize domestic companies to purchase semiconductor equipment, mainly fab equipment. The amount of the subsidy is equivalent to 20% of the procurement cost.
In October, the Biden administration unveiled a broad set of export controls, including one that banned the supply to China of certain semiconductor chips made using American tools anywhere in the world, greatly expanding Washington's scope to curb Beijing's technological and military developments.
Two Reuters sources revealed that the plan will be implemented as early as the first quarter of next year. They said most of the program's money would be used to subsidize domestic companies to purchase semiconductor equipment, mainly fab equipment. The amount of the subsidy is equivalent to 20% of the procurement cost.
In October, the Biden administration unveiled a broad set of export controls, including one that banned the supply to China of certain semiconductor chips made using American tools anywhere in the world, greatly expanding Washington's scope to curb Beijing's technological and military developments.
In addition, the United States also lobbied its allies Japan and the Netherlands, two countries with strong strength in the field of chip manufacturing, to join the United States in imposing a technology blockade on China and no longer exporting chip equipment and related technology products to China.
U.S. President Joe Biden signed the $52.7 billion chip bill in August, helping U.S. semiconductor production and research and providing $24 billion in tax breaks to chip factories.
Reuters sources said Beijing's goal in rolling out the incentive package is to fund Chinese chip companies to build, expand or upgrade their manufacturing, assembly, packaging and research and development facilities.
This incentive program will provide support to state-owned and private enterprises in China's chip industry, such as Beichuang Group, AMEC, Shenyang Xinyuan, etc.
The news has sharply raised the stock prices of Chinese chip companies on the Hong Kong stock market. SMIC's stock rose nearly 10 percent on the day, and Shanghai Huahong's rose as much as 17 percent.
U.S. President Joe Biden signed the $52.7 billion chip bill in August, helping U.S. semiconductor production and research and providing $24 billion in tax breaks to chip factories.
Reuters sources said Beijing's goal in rolling out the incentive package is to fund Chinese chip companies to build, expand or upgrade their manufacturing, assembly, packaging and research and development facilities.
This incentive program will provide support to state-owned and private enterprises in China's chip industry, such as Beichuang Group, AMEC, Shenyang Xinyuan, etc.
The news has sharply raised the stock prices of Chinese chip companies on the Hong Kong stock market. SMIC's stock rose nearly 10 percent on the day, and Shanghai Huahong's rose as much as 17 percent.
At the 20th Party Congress in October, Communist Party General Secretary Xi Jinping stressed China's need to achieve technological autonomy and vowed to win competition in "core technology."
But China's past similar approach in this area does not provide an optimistic reference for Mr. Xi to win a new tech race. In the past few decades, China has also engaged in many people's wars of "chip manufacturing" in an attempt to achieve major breakthroughs in key technologies through large investment, but the so-called "chip" enterprises have gone bankrupt after exhausting state funding, leaving a "rotten building".
China is an important chip market for Japan and the Netherlands. Some in the industry worry that China could retaliate if the two countries cooperate with the United States in implementing export controls.
Chinese officials accused the United States of repeatedly abusing export control measures, maliciously blocking and suppressing Chinese enterprises, coercing allies to participate in economic containment of China, and causing great destroy of the stability of the global industrial supply chain. Beijing hopes that relevant countries will independently make correct judgments based on their own long-term interests and the fundamental interests of the international community.
A senior official at China's Ministry of Commerce said Monday that China filed a complaint with the World Trade Organization on the same day over U.S. export controls on Chinese chips and related products.
But China's past similar approach in this area does not provide an optimistic reference for Mr. Xi to win a new tech race. In the past few decades, China has also engaged in many people's wars of "chip manufacturing" in an attempt to achieve major breakthroughs in key technologies through large investment, but the so-called "chip" enterprises have gone bankrupt after exhausting state funding, leaving a "rotten building".
China is an important chip market for Japan and the Netherlands. Some in the industry worry that China could retaliate if the two countries cooperate with the United States in implementing export controls.
Chinese officials accused the United States of repeatedly abusing export control measures, maliciously blocking and suppressing Chinese enterprises, coercing allies to participate in economic containment of China, and causing great destroy of the stability of the global industrial supply chain. Beijing hopes that relevant countries will independently make correct judgments based on their own long-term interests and the fundamental interests of the international community.
A senior official at China's Ministry of Commerce said Monday that China filed a complaint with the World Trade Organization on the same day over U.S. export controls on Chinese chips and related products.
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