China is set to allocate 1 trillion yuan ($143 billion) to boost semiconductor production.
On the one hand, China is affected by the corona virus, but on the other hand, it has started to take every action as if it cannot leave its production for anyone.
China, the world’s manufacturing powerhouse, is poised to take further steps to maintain its position. One of them is China’s 1 trillion yuan announcement
China – Taiwan
China’s move is also expected to reduce its dependence on Taiwan amid tensions between China and Taiwan.
Another reason for this is America. It is also seen as a key decision China will take to counter the US.
Amid the China-Taiwan conflict, the US is supporting Taiwan. Meanwhile, China is heavily dependent on Taiwan for semiconductor production. As a result, there is a fear that the United States may use Taiwan as a pawn against China.
America’s View
In addition to this, as the United States is putting every obstacle in the way of blocking China’s technology, the United States’ eyes have now turned to semiconductors.
Meanwhile, China is planning to allocate such a huge fund for semiconductor promotion.
It has been reported that this fund can be made in the next 5 years and apart from this, it is planned to give many benefits to the manufacturers like tax concession.
Export trade
Amid ongoing political tensions, demand for produce is increasing, affecting export trade.
Due to this, many international countries are also facing problems. It has already made a huge impact on the automotive industry.
Due to this, it is also expected that the government may directly focus on this sector in the future.
Semiconductor chip manufacturing
Already considering China’s production, countries including India have started structures to increase their production.
In the meantime, it seems that China has hastily taken up such a project. The US Department of Commerce issued a detailed announcement last October.
In it, the US government decided to impose restrictions and restrictions on supplying and exporting any equipment to the semiconductor chip manufacturing companies in China. Because of this, it is expected that there will be a large shortage at the international level.
Joe Biden
Meanwhile, US President Joe Biden announced a $53 billion subsidy to boost semiconductor production last August.
This includes a $24 billion tax credit. Similarly, India has also provided tax incentives for semiconductor manufacturing through its PLI scheme.
It is in the midst of many such reasons that China has now developed a plan.