China’s New $21 Billion High-Tech Manufacturing Fund Likely To Rankle U.S.
The Trump administration has criticized China for subsidizing the technology and advanced manufacturing sectors. China’s New $21 Billion High-Tech Manufacturing Fund Likely To Rankle U.S.
China set up a $21 billion fund to further develop its advanced manufacturing sector, demonstrating that Beijing is pursuing its ambition to lead globally in technology, despite U.S. criticism of subsidies.
The government-backed fund of 147.2 billion yuan ($20.9 billion), established Monday, will invest in companies working on areas including new materials, next-generation information technology and electrical equipment, a filing by one of the fund’s investors showed.
Those three areas are among the 10 cutting-edge sectors that China has prioritized in its “Made in China 2025” plan to dominate globally in technology.
The Trump administration has criticized Made in China 2025 as relying heavily on government subsidies and forced technology transfers from Western companies. Beijing dropped reference to the plan this year but is still seeking to surpass the rest of the world in technology and advanced manufacturing.
Experts said the new fund is likely to draw objections from the U.S. while the two countries are divided over core trade issues in talks to reach a limited initial deal.
“This appears to be the latest effort to promote the China 2025 plan, which explicitly aims to develop advanced technologies while excluding foreign firms from Chinese markets for those technologies,” said Jeff Moon, a former assistant U.S. trade representative for China.
The fund will invest in both growing companies and established companies, according to the filing by CRRC Corp. , the state-owned rail behemoth.
This is the second fund in a month that China has established to support its manufacturing and technology sectors. In October, China set up its second semiconductor fund, of around $29 billion.
Communist Party officials last month were set to discuss a revamped industrial policy to supplant Made in China 2025, The Wall Street Journal reported.
The backers of the new manufacturing fund include China’s Ministry of Finance as well as the state-run tobacco monopoly, state-run auto maker FAW Group and state-owned CRRC, according to corporate registration information.
The Ministry of Finance and the National Development and Reform Commission, China’s economic-planning agency, didn’t immediately respond to requests for comment. The fund couldn’t be reached for comment.
In recent years, China has established many government-backed funds worth billions of dollars that target the advanced manufacturing and technology sectors in Made in China 2025. Those include the first national semiconductor fund, of 139 billion yuan, as well as a 40 billion yuan fund for emerging and high-tech industries. China’s New $21 Billion,China’s New $21 Billion,China’s New $21 Billion,China’s New $21 Billion
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