China’s central bank has announced plans to set up a 500 billion yuan ($70 billion) re-lending programme to back the country’s science and technology industries.
The programme will offer loans via 21 banks to small and midsize technology companies at an interest rate of 1.75%, the People’s Bank of China said in a statement on Sunday.
The one-year loans can be extended twice, for up to a year each time, the statement added.
Also on AF: Dutch May Give in to US Push Against Servicing China Chip Tools
China’s policymakers look to boost liquidity and increase confidence in the world’s second-biggest economy amid headwinds from a property crisis and frictions with major trading partners.
Analysts expect the technology industry to become China’s next driver of growth amid a downturn in its real-estate sector, which once accounted for about 25% of the country’s GDP.
At the same time, the Xi Jinping-led Chinese government is also looking to combat a technology war unleashed by the United States and Europe.
Washington and Brussels are taking increasing measures to clamp down on flows of advanced technology to Beijing. They are also taking steps to increase tariffs on Chinese manufactures deemed to be benefiting from China’s generous state subsidies.
Both the US and Europe, for instance, are taking steps to curb the flows of advanced chips and chipmaking tools to China, citing concerns about their use by the Chinese military.
Both have also opened probes into Chinese EV-manufacturers. While the US has cited concerns over data flows to Beijing, Europe has said Chinese carmakers might have an ‘unfair’ advantage over local manufacturers due to the backing of Chinese state subsidies.
US Treasury Secretary Janet Yellen is currently visiting China to raise concerns about the country’s ‘excess production’ of clean energy technology, such as EVs and solar panels, backed by massive subsidies from Beijing.
But far from curbing investment in manufacturing, China has doubled down on Xi’s new mantra of unleashing “new productive forces”.
The country’s policymakers have stepped up investments in cutting-edge technology including semiconductors, electric vehicles, quantum computing, commercial spaceflight and life sciences – areas where many Western firms hold advantages.
View this post on Instagram
- Reuters, with additional editing by Vishakha Saxena
Also read:
China Bans Government Computers From Using Intel, AMD Chips: FT
China Aims for Self Sufficiency in Emerging Tech, AI, Big Data
US Panel Wants Investment Ban on Critical Tech Sectors in China
SMIC, Huawei Big Winners as China Ramps Up Chip Funding
Huawei, US-Sanctioned Firms Win as China Dumps Western Tech
China Ups Approvals for Public AI Models in Race to Rival US
US, EU Can’t Meet Climate Goals Without China’s Cheap Green Tech
EU Says China EVs Funded by Subsidies, Plans Retroactive Tariffs
China Vows to Help EV Makers Expand Overseas, Fight Sanctions
China’s Secret Drive to ‘Delete America’ From Its Tech – WSJ
China ‘Closing Gap’ on US in Quantum Technology Race – SCMP
