Up to a fifth of the cost should be reimbursed by the Chinese government to companies that expand their manufacturing and research capabilities in semiconductor chip production. China wants to compensate for the US restrictions on technology exports to China.
Support for the next five years
The total amount of money that the Chinese government plans to allocate to support domestic semiconductor chip manufacturers is expected to reach more than one trillion yuan, or about $143 billion. Citing informed sources, Reuters reported. The support consists of subsidies and tax breaks and is to be spread over the next five years.
Reaction to the US action
According to Reuters, the launch of the entire program is scheduled for the first quarter of next year. China is responding to trade restrictions by the United States. They have limited chip exports to China and are pressuring their allies in the same spirit. The aim of these restrictions is to make it more difficult for China to make the technological ascent that could ensure not only its scientific and technological ascent but also its economic ascent and take over the baton of economic leadership from the USA. China has also filed a chip trade policy complaint with the World Trade Organisation.