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China plans reforms to protect the chip industry from Trump threat

bloombergquint 2020 09 b40753c8 755c 428b 80d9 8e215f210052 232469840 China plans reforms to protect the chip industry from Trump threat

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 to 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 said.

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 US$1.4-trillion through to 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.

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