Corruption and waste of money
Top officials in Beijing directed a series of anti-graft investigations into industry figures last summer, blaming corruption on wasteful and inefficient investment.
Insiders said that the “big fund” is likely to lose ground as a result of wasteful investment and inefficiency.
All of the developments occurred while semiconductors were increasingly becoming a major battleground in the rivalry between China and the United States.
Xi has repeatedly spoken of the need for a sense of urgency to confront China’s so-called choke points, areas in which the country remains heavily dependent on the United States and other foreign powers including critical technologies such as chips.
Xi has pleaded with top officials to become self-sufficient in key technologies as the United States moves to isolate China.
Upon receiving an unprecedented third term in October 2022, Xi pledged to “move faster” in implementing strategic projects to increase innovation, saying, “Efforts will be made to improve the new system of nationwide resource mobilization to achieve major technological successes and enhance China’s strength in strategic science and technology.” “.
Additional incentives
Faced with this, Chinese officials recently discussed offering additional incentives to domestic semiconductor companies. But many see the difficulty of amassing a large amount after Beijing has spent huge sums to fight Covid over the past years, according to the people.
Instead, officials are now asking local suppliers of semiconductor materials to lower prices to provide support to customers locally, the people said.
Weak tax revenues, declining land sales and the cost of stopping the spread of the Covid virus have squeezed the Chinese government’s financial resources, pushing the fiscal deficit to a record level in 2022.
America is proposing to Europe that it targets China with export restrictions like Russia