The Chinese government intends to invest 1 trillion yuan ($143 billion) in the development of the country's semiconductor industry.
The money will be allocated over the next five years mainly in the form of tax breaks and subsidies. It would be one of the biggest industry stimulus packages ever earmarked by the Chinese government.
According to the agency, the Chinese government has made such a significant expenditure because it considers the development of industry one of the pillars of the country's economic well-being. By providing massive tax breaks, the authorities hope to overcome the problem of semiconductor shortages and ensure technological independence from the United States. Most of the financial aid will be used to subsidize purchases of domestic semiconductor equipment by Chinese firms. The subsidy will amount to 20 percent, the sources assure.
The official launch of the program should be announced in the first quarter of 2023.
In early October, the Joe Biden administration tightened restrictions on U.S. technology exports to the PRC. According to the government decree, U.S. companies and individuals are prohibited from selling semiconductors created using U.S. technology without obtaining an export license. Any trade of semiconductors with Chinese partners should be approved by the US authorities.
Earlier the president of the USA signed the law on allocation to the semiconductor industry of the country $52,7 billion in the form of grants and $24 billion in the form of tax privileges.