China has declared tax breaks to spur expansion of its semiconductor industry after U.S. sanctions that cut off access to American processor chips for tech giant Huawei and some other Businesses
BEIJING — China declared tax breaks Monday to the expansion of its semiconductor industry following U.S. sanctions that alerted the ruling Communist Party by cutting off access to American processor chips for technology giant Huawei and some other businesses.
Critics announced accelerating efforts to transform China into a self-reliant”technology energy” to be this year’s top economic priority after the tariff war with Washington emphasized its own reliance on U.S. components for smartphones and other businesses Beijing wants to develop.
Chipmakers can import machines and raw materials tax-free through 2030, the Finance Ministry and other agencies declared. They did not say how big a subsidy to producers which may represent.
Beijing has spent heavily over the past two decades to build up a Chinese chip industry, but its makers of smartphones and other technology nevertheless rely on the USA, Europe and Taiwan for their advanced components.
Then-President Donald Trump cut off Huawei Technologies Ltd.’s accessibility to U.S. chip chips and other technologies in 2019 in a struggle over Beijing’s industrial ambitions.
Last year, Trump tightened curbs by prohibiting global suppliers from using U.S. technology to make chips for Huawei. That threatens to cripple its own smartphone company, which had been the No. 1 worldwide seller in ancient 2020 but has fallen out of the top five manufacturers.
Political analysts expect little change in the U.S. place under President Joe Biden, who succeeded Trump in January. The Huawei founder, Ren Zhengfei, said in February it’s”unlikely” sanctions will be lifted.
Processor chips and other semiconductors are China’s biggest single import, totaling over $300 billion a year.
Beneath the most recent measure, machinery and raw materials”that can’t be produced or whose performance can’t fulfill need” will be exempt from import tax, the government said.
That applies to photoresists, masks, polishing fluids and pads, silicon crystals and wafers, materials to construct clean rooms and other manufacturing supplies, according to the statement.
