Shanghai to give tax incentives and funds to nurture home-grown chips industry as China enters next battlefront over technology

Shanghai’s government will offer tax incentives and funding to nurture China’s home-grown industry of producing semiconductor chips, as the country finds itself drawn into a new battlefront over technology with the United States.

Integrated circuits (IC), artificial intelligence (AI) and biotechnology will be the three key industries that the municipal government of China’s premier commercial city will focus its resources on, said Shanghai’s Vice Mayor Wu Qing during a press conference in the city.

“We have made some achievements in the industries that face the prospect of being strangled [by other countries],” Wu said, adding that the municipal authority will soon announce the details in a document called the Shanghai Programme.

Chinese companies already claim several superlatives in 21st century technology, including the largest maker of phone equipment and the dominant platform for online shopping, as well as electronic payments. But the core components of all these companies are made by either Intel or Qualcomm, and the operating systems at the heart of their applications are by Google’s Android unit in smartphones, or Microsoft for computers.