Shanghai’s municipal government is providing up to CNY100 million to subsidize investments in semiconductors, biomedicine, and artificial intelligence (AI). Mega projects related to semiconductor equipment and materials, including components, raw materials and high-end software such as electronic design automation (EDA), will be subsidized by up to 30% of the total project investment, or a maximum of CNY100 million, according to a policy announcement. The city also plans to boost key AI projects, such as intelligent chips, core algorithms, operating systems and basic software, with subsidies of less than 30% of the total investment, up to a maximum of CNY20 million. The policy, which consists of 24 measures focusing on “accelerating the construction of a modern industrial system”, aims to “enhance the vitality of industrial development” and “improve the city’s core competitiveness”. The policy will be implemented between 2023 and 2028.
The support follows a decision by the central government to emphasize “high-quality development” after prioritizing fast economic growth for years. China also wants to become more self-reliant in technological innovation as it seeks to counter Washington’s use of sanctions to contain the country’s tech progress. China’s 14th Five Year Plan, which was announced in March 2021, listed semiconductors and AI as the two pillars underpinning future technology development in the next five years. The total value of the semiconductor, biomedicine, and AI industries in Shanghai – designated by the city government as strategic sectors in its long-term blueprint – reached CNY1.4 trillion last year. In the chip sector alone, the city accounts for one-quarter of the country’s semiconductor value output and 40% of the country’s chip talent.
Shanghai is home to a number of leading semiconductor companies, particularly in the Zhangjiang hi-tech park in the city’s Pudong district. These include the country’s largest chip foundry Semiconductor Manufacturing International Corp (SMIC) and chip equipment maker Shanghai Microelectronics. As part of the measures, the city government will also give up to CNY100 million support to introduce “strategic emerging industrial projects” that “undertake national strategic tasks and break foreign monopolies” in “high-end, intelligent, green manufacturing” areas. The government also pledges to give financial support for the development of four new industries: electric and intelligent vehicles, green and low-carbon projects, the digital economy and the metaverse. In recent months, other city governments, including Suzhou in Jiangsu province, Hangzhou in Zhejiang province, and Guangzhou and Shenzhen in Guangdong province, have also ramped up efforts to promote their semiconductor industry.
Meanwhile, the South China Morning Post reports that Tencent CEO Pony Ma is supporting Heilongjiang province’s development in the digital economy, transport, energy and agriculture. Ma has already helped incubate and foster the growth of more than 100 start-ups in the rust-belt province. Tencent’s investments in Heilongjiang date back to 2015, when the company and Beijing-based JD.com agreed with the provincial government to jointly work on cross-border e-commerce and big data initiatives, as well the incubation of start-ups.
