Beijing’s investment comes in response to US efforts to restrict Chinese access to advanced technologies FILE PHOTO © Getty Images / mailsonpignata; 500px

Beijing has launched a new state-backed investment fund focused on advancing the country’s semiconductor industry, according to a report by the Chinese corporate information service Qichacha. The move comes in response to US efforts to restrict China’s access to advanced chips.

Dubbed the China Integrated Circuit Industry Investment Fund Phase III and worth 344 billion yuan ($47 billion), it is the third of its kind in a series of investments China has made over the past decade with the goal of bolstering the Chinese chip sector and making the country self-sufficient in the production of semiconductors.

The first such fund was launched in 2014 with an investment of about 140 billion yuan, with another opened in 2019 worth about 200 billion. Together they are also known as the Big Fund – a financing scheme to promote Beijing’s “Made in China 2025” industrial development plan.

While no details about the fund’s investment targets have yet officially been disclosed, previous media reports have suggested that it will focus on artificial intelligence-related semiconductors and manufacturing equipment, as well as on research and development projects aimed at enhancing AI capabilities using existing technology.

The initiative is being led by the country’s Finance Ministry, which holds a 17% stake. Another 10% belongs to the state-owned National Development Bank, while an investment company under the Shanghai municipal government holds 9%, alongside 16 other state-owned entities.

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Beijing’s efforts to boost its chip-making capabilities comes as the US continues to impose strict export limits on advanced semiconductors and relevant fabrication equipment, in hopes of limiting China’s ability to produce and acquire cutting-edge technology, as it fears this may be used to boost its military capabilities.

Earlier this month, Reuters reported that the White House was also considering introducing an outright ban on the export to China of advanced AI models, such as those underpinning systems like ChatGPT.

“These items and capabilities are used by [China] to produce advanced military systems including weapons of mass destruction…and [to] commit human rights abuses,” the US Department of Commerce claimed.

Beijing, meanwhile, has repeatedly rejected Washington’s accusations and has urged it to remove the “illegal unilateral sanctions” against Chinese companies and not undermine China’s legitimate right to develop. (RT)