China to set up $30bn fund to support its electronics industry

China is to set up a ¥200bn ($30bn) fund to support the country's significant electronics supply chain. The fund will be created through a strategic partnership between an industry group controlled by China's Ministry of Industry and Information Technology and Ping An Bank. The signing ceremony was attended by representatives of many of China's largest technology companies including Lenovo and Alibaba. At this stage, no detail has been given how the money would be spent but given the pressures of a depreciating currency and the economic slowdown, it may be used to help the many low-margin, small and medium-sized electronics manufacturers that are facing financial difficulties in order to build a "strong manufacturing country". The new fund may also be used to develop advanced technologies to enable China to expand its tech capabilities and build an "Internet power". It is not clear whether the fund will be used to support acquisitions, which would resemble the fund that was launched in 2014 to support the country's semi-conductor industry.    

HONG KONG — A Chinese technology regulator said on Friday that it would cooperate with a bank to set up a $30 billion fund to support the country’s huge electronics supply chain.

The creation of the new fund underscores China’s ambitions to expand its tech capabilities and also signals how those ambitions are being threatened by slowing growth and recent market turmoil.

Official accounts of the fund did not make clear precisely how the money would be spent. But given the recent weakness in Chinese manufacturing and lower-end electronics manufacturers, it may be intended as a form of stimulus to the tech industry. The terminology used in media accounts signals China’s bold technology ambitions. Reports about the new fund said it would be used to build a “strong manufacturing country” and an “Internet power.”

A report in state-run media said the fund was created to address problems faced by small and medium enterprises that have come under pressure or folded recently because of a lack of funding. The report made reference to recent factory closures, specifically pointing out the closing in October of Fu Chang Electronic Technology, a supplier to the telecom equipment makers Huawei and ZTE.