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US-China tech war
TechPolicy

Tech war: China’s hi-tech state fund grows to over US$8 billion in self-sufficiency drive

  • The National Fund for Technology Transfer and Commercialisation had pumped tens of billions of yuan into hundreds of enterprises, state media reported
  • China has long used state-level financing to boost major industries, an effort that has become more urgent amid intensifying rivalry with the US

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A worker stands in front of a display showing a computer chip and the Chinese word for “independence”. Photo: AP Photo
Lilian Zhang
A Chinese state fund, which was launched in 2014 to transform research results into business ventures, has reached 62.4 billion yuan (US$8.7 billion), according to state media, as Beijing leans on a top-down “whole-country” approach in its bid for technological self-sufficiency.
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By the end of 2022, the National Fund for Technology Transfer and Commercialisation (NFTTC) had set up 36 sub-funds to pump nearly 36 billion yuan into 616 enterprises, and had helped turn 974 scientific and technological achievements into profit-oriented projects, the Beijing-based Economic Information Daily reported on Wednesday.

Established by the Ministry of Science and Technology and the Ministry of Finance, the NFTTC supports efforts by national and local governments and public institutions to commercialise their new technologies, products, materials and devices.

A visitor to the China Beijing International High-tech Expo looks at a computer chip through a microscope. Photo: AP Photo
A visitor to the China Beijing International High-tech Expo looks at a computer chip through a microscope. Photo: AP Photo

The NFTTC makes investments along with other institutional investors, including private equity funds and local government-backed funds, according to guidelines published on its official website.

The national fund is required to keep its total investments in all sub-funds between 20 to 30 per cent. It is barred from being a major shareholder in any sub-fund. The key investment direction must be in China’s hi-tech sectors, such as digital information, biomedicine, aerospace and new materials, the guidelines said.

Over the past decades, China has been using state-level financing to shore up major industries. Those efforts have become increasingly urgent as the country races to reduce reliance on foreign technology amid intensifying rivalry with the US.

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The China Integrated Circuit Industry Investment Fund, also known as the Big Fund, was set up in 2014 as the primary financing vehicle for the nation’s semiconductor industry, with the initial round of investments reaching more than 138 billion yuan. However, the fund was engulfed in a corruption scandal last year, as several of its executives came under investigation.
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