China is temporarily halting its investment in the chip sector, sources tell Bloomberg. And this while Chinese President Xi Jinping sees the development of his own chip companies as one of his top priorities to continue to compete with the United States in the field of economy and defense.
“The problem is that China doesn’t know exactly where all the investment in the chip sector is going,” says BNR China expert John-Boy Vossen. “There is a lot of corruption. And if you keep depositing money and the result is disappointing, obviously you’d rather spend that money differently, even if the chip industry is a spearhead.’
The coronavirus plays an important role in this decision. The aftermath of the virus has a major impact on the Chinese economy. For example, some factories cannot produce at full capacity.’ China is therefore now suspending investments in the chip sector – which amount to an estimated $135 billion – to pump money into the economy in a different way.
Disappointing results
China said in 2015 that it wants to produce 40% of all chips by 2020 and 70% by 2025. ‘They have therefore invested heavily in the chip sector, but the results are disappointing. In the end, they make “only” seventeen percent of the production.’
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
