Winton Dong

dht0620@126.com

CHINA has recently invited foreign enterprises to invest in its top State-run semiconductor fund, as Beijing is aiming to speed up Chinese chip development to achieve core technological breakthroughs.

Such a move came in the wake of trade tensions with the United States after Washington imposed a seven-year prohibition on famous Shenzhen-based telecom equipment maker ZTE from buying any U.S. technologies, a penalty that severely threatens its supply chain. Insiders point out that the real reason the United States is coming up with more and more pretexts to target Chinese investments and tech companies is to thwart China’s plan to transform itself into a global technological power.

The integrated circuit fund, which was founded in 2014, accumulated 140 billion yuan (US$22.2 billion) in just the first round. Now its target is to raise about 200 billion yuan in the second round to help China get a leading position in integrated circuit (IC) design and manufacturing and even in the coming race in 5G telecom technologies.

To the outside world it may be quite strange and curious that, even with the U.S. suffocating some Chinese enterprises by prohibiting the purchase of core technologies from America, China does not coward back — it instead embraces the world and foreign investment more firmly. This is also a strong signal that China will open further and raise high the banner of global cooperation in the future.

The ZTE incident is a wake-up call for China. It is an undeniable fact that China has made substantial progress in telecom production over recent years. However, such prosperity in mass production cannot cover the fact that we lack core technologies. In a globalized world, from an economic perspective, pouring big money into the development of IC technologies now may not be the best and most profitable way to develop the industry in China, but total reliance on foreign technologies has proven to be the worst and suicidal way.

Between May 3 and 4, U.S. Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, U.S. Trade Representative Robert Lighthizer and other high-level officials led a delegation to visit Beijing, aiming to ease escalating trade tensions between two of the largest economies in the world. Taking into account the big size of the Chinese and U.S. economies and the complexity of relationship, it is virtually impossible to resolve the problem between the two nations in one meeting.

There is no arrow returning when you let it fly. China highly values the willingness the United States has shown to address the current trade friction between the two countries. However, the time when China could be forced to open its door unfairly is long past. The country is opening wider now, but not simply to appease others. No matter what U.S. diplomats have said or promised, China should not hesitate to carry on its own core technologies research and development. Moreover, with the further improvement of Chinese economic strength, the country should also be fully prepared with both hard and soft solutions to deal with the capricious U.S. administration as bilateral trade relations are far from uneventful and tensions will surely be more frequent in the coming years.

Money and talent are two indispensable factors for China’s semiconductor breakthrough. With strong financial support from the government and enterprises, it is not impossible to attract high-caliber experts from all over the world. China can also enhance its capabilities in the IC industry by merger with and acquisition of some key firms.

Rome was not built in a day. While financial investment and qualified researchers are crucial, we also need time and patience to change our present backward situation in the chip sector. From design and processing to equipment, there is a long industrial chain around semiconductor production that will require a long and difficult period before China accumulates experience and achieves success.

(The author is the editor-in-chief of the Shenzhen Daily with a Ph.D. from the Journalism and Communication School of Wuhan University.)