China’s Sweeping Support for the Chip Sector
China to Plan Sweeping Support for Chip Sector to Counter Trump
Bloomberg News — With assistance by Sharon Chen, Yuan Gao, and Steven Yang – 3 September 2020
China is planning a sweeping set of new government policies to develop its domestic semiconductor industry and counter Trump administration restrictions, conferring the same kind of priority on the effort it accorded to building its atomic capability, according to people with knowledge of the matter.
Beijing is preparing broad support for so-called third-generation semiconductors for the five years through 2025, said the people, asking not to be identified discussing government deliberations. A suite of measures to bolster research, education and financing for the industry has been added to a draft of the country’s 14th five-year plan, which will be presented to the country’s top leaders in October, the people
China’s top leaders will gather next month to lay out their economic strategy for the next half decade, including efforts to ramp up domestic consumption and make critical technology at home. President Xi Jinping has pledged an estimated $1.4 trillion through 2025 for technologies ranging from wireless networks to artificial intelligence. Semiconductors are fundamental to virtually every component of China’s technology ambitions — and an increasingly aggressive Trump administration threatens to cut off their supply from abroad.
“The Chinese leadership realizes that semiconductors underpin all advanced technologies, and that it can no longer dependably rely on American supplies,” said Dan Wang, technology analyst at research firm Gavekal Dragonomics. “In the face of stricter U.S. restrictions on chip access, China’s response can only be to keep pushing its own industry to develop.”
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