Faced with US sanctions, China is preparing a $143 billion package for its chip companies

According to the sources, Beijing intends to implement one of its largest fiscal incentive packages, distributed over five years, primarily in the form of subsidies and tax credits, to support domestic semiconductor production and research initiatives.
It denotes, as many had predicted, a more assertive stance by China in determining the course of an industry that has become a geopolitical flashpoint as a result of increasing chip demand and that Beijing sees as a pillar of its technological strength.
  Source: FirstpostAnalystspredict that it will also intensify worries about China’s chip industry rivalry in the United States and its allies. Already, some American legislators are alarmed by China’s expansion of its semiconductor manufacturing capabilities.According to two people who asked to remain anonymous because they were not authorised to speak to the media, the proposal may be put into action as early as the first quarter of 2019.According to Morgan Stanley, Avatar’s excellent Chinese debut sets up a rally in the film stock.China stocks now have significant upside potential as Morgan Stanley goes bullish on them.The reopening of China in 2023, according to Deutsche, will improve the value of cosmetics stocks, including Estee Lauder. According to them, the majority of the financial aid would be used to finance Chinese companies’ acquisitions of domestic semiconductor equipment, mostly for semiconductor production factories, or fabs.According to the three sources, such businesses would be eligible to a 20% discount on the cost of acquisitions.The financial support plan follows the U.S. Commerce Department’s adoption in October of a comprehensive set of regulations that, among other restrictions, may prevent research laboratories and commercial data centres from accessing cutting-edge AI processors.Additionally, the United States has lobbied several of its allies, such as Japan and the Netherlands, to restrict semiconductor manufacturing equipment shipments to China .  Additionally, in August, U.S. President Joe Biden signed a historic law that will offer $52.7 billion in subsidies for American semiconductor manufacture and research as well as a $24 billion in tax credits for chip factories.Beijing wants to increase funding for Chinese chip companies building, enlarging, or modernising local fabrication, assembly, packaging, and research and development facilities, according to the sources.According to them, Beijing’s most recent plan also includes favourable tax regulations for the nation’s semiconductor industry. Share your views in the comments section below .