China's electronic information manufacturing sector maintains fast expansion | investinchina.chinadaily.com.cn

China's electronic information manufacturing sector maintains fast expansion

investinchina.chinaservicesinfo.com Updated: Jun 09, 2023
[Photo/VCG]

The electronic information manufacturing industry is one of the industries in which the foreign capital entered the earliest. Since reform and opening up began, China has attracted multinational electronic information enterprises to invest in China by virtue of its competitive factors of production, gradually extending China's electronic information industry from assembling and processing to high value-added industrial chain links, and forming an electronic information industry system supported by complete industrial chains.

Over recent years, with a view to moving the electronic information industry up the value chain, China has strengthened the top-level design. China's 14th Five-Year Plan (2021-25) clearly proposed to encourage enterprises to invest in manufacturing of integrated circuits and other fields. Special plans such as the Plan for Development of Digital Economy during the "14th Five-Year Plan"  Period and the Plan for Development of Information and Communication Industry during the "14th Five-Year Plan" Period, clearly proposed to support the development of key fields such as integrated circuits, new displays, smart health and elderly care and ultra-high definition video, strengthen the research, development, design and production of key technologies and products related to integrated circuits, and encourage the world's leading electronic information enterprises to deepen their cooperation with China, which pointed out the direction for intensified and open cooperation in key fields of electronic information industry.

Foreign investors are encouraged to invest in key fields of electronic information. The Catalogue of Industries in which Foreign Investment is Encouraged (Version 2020) implemented in January 2021 adds or revises the entries about integrated circuit test equipment, L3/L4/L5 automatic driving hardware, ventilator, and AI-aided medical equipment. The Catalogue of Industries in which Foreign Investment is Encouraged (Version 2022) further expanded the scope of foreign investment in electronic information industry, and added the entries about production and regeneration of wafer, lead-free solder paste for surface mounted technology (SMT), and development and manufacturing of high-purity (electronic grade) polysilicon materials, which will play an important role in encouraging the foreign-funded enterprises to make investment in key links and fields in electronic information industry and ensuring the security and stability of industrial and supply chains.

With a view to supporting the development of integrated circuit industry, in 2020, China issued the Several Policies for Promoting the High-quality Development of Integrated Circuit Industry and Software Industry in New Era, giving the 10-year tax exemption treatment to the domestically-funded and foreign-funded enterprises with the IC linewidth of no more than 28nm, the 5-year tax exemption and 5-year tax reduction treatment to the domestically-funded and foreign-funded enterprises with the IC linewidth of no more than 65nm, and the "2-year tax exemption and 3-year tax reduction" treatment to the domestically-funded and foreign-funded enterprises with the IC linewidth of no more than 130nm.

In recent years, some foreign-funded enterprises have adjusted their production layouts on a global scale and optimized their investment direction in China. For example, in the field of semiconductors, a number of foreign-funded semiconductor enterprises actively cooperated with domestically-funded enterprises for localized development through the establishment of joint ventures led by Chinese mainland capital. Following the industrial upgrading trend in China, some foreign-funded electronic information enterprises turned to the high-end segment of China’s electronic information industrial chain.

From 2012 to 2021, the added value of China's electronic information manufacturing industry has achieved an annual growth rate of 11.6 percent, with operating income increasing from 7 trillion yuan ($999.6 billion) to 14.1 trillion yuan. Intensive technological innovation has emerged in fields such as integrated circuits, new displays, and fifth-generation mobile communications. The innovation iteration of products such as basic software, industrial software, and emerging platform software has continued to accelerate.

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China's electronic information manufacturing sector maintains fast expansion

investinchina.chinaservicesinfo.com Updated: Jun 09, 2023
[Photo/VCG]

The electronic information manufacturing industry is one of the industries in which the foreign capital entered the earliest. Since reform and opening up began, China has attracted multinational electronic information enterprises to invest in China by virtue of its competitive factors of production, gradually extending China's electronic information industry from assembling and processing to high value-added industrial chain links, and forming an electronic information industry system supported by complete industrial chains.

Over recent years, with a view to moving the electronic information industry up the value chain, China has strengthened the top-level design. China's 14th Five-Year Plan (2021-25) clearly proposed to encourage enterprises to invest in manufacturing of integrated circuits and other fields. Special plans such as the Plan for Development of Digital Economy during the "14th Five-Year Plan"  Period and the Plan for Development of Information and Communication Industry during the "14th Five-Year Plan" Period, clearly proposed to support the development of key fields such as integrated circuits, new displays, smart health and elderly care and ultra-high definition video, strengthen the research, development, design and production of key technologies and products related to integrated circuits, and encourage the world's leading electronic information enterprises to deepen their cooperation with China, which pointed out the direction for intensified and open cooperation in key fields of electronic information industry.

Foreign investors are encouraged to invest in key fields of electronic information. The Catalogue of Industries in which Foreign Investment is Encouraged (Version 2020) implemented in January 2021 adds or revises the entries about integrated circuit test equipment, L3/L4/L5 automatic driving hardware, ventilator, and AI-aided medical equipment. The Catalogue of Industries in which Foreign Investment is Encouraged (Version 2022) further expanded the scope of foreign investment in electronic information industry, and added the entries about production and regeneration of wafer, lead-free solder paste for surface mounted technology (SMT), and development and manufacturing of high-purity (electronic grade) polysilicon materials, which will play an important role in encouraging the foreign-funded enterprises to make investment in key links and fields in electronic information industry and ensuring the security and stability of industrial and supply chains.

With a view to supporting the development of integrated circuit industry, in 2020, China issued the Several Policies for Promoting the High-quality Development of Integrated Circuit Industry and Software Industry in New Era, giving the 10-year tax exemption treatment to the domestically-funded and foreign-funded enterprises with the IC linewidth of no more than 28nm, the 5-year tax exemption and 5-year tax reduction treatment to the domestically-funded and foreign-funded enterprises with the IC linewidth of no more than 65nm, and the "2-year tax exemption and 3-year tax reduction" treatment to the domestically-funded and foreign-funded enterprises with the IC linewidth of no more than 130nm.

In recent years, some foreign-funded enterprises have adjusted their production layouts on a global scale and optimized their investment direction in China. For example, in the field of semiconductors, a number of foreign-funded semiconductor enterprises actively cooperated with domestically-funded enterprises for localized development through the establishment of joint ventures led by Chinese mainland capital. Following the industrial upgrading trend in China, some foreign-funded electronic information enterprises turned to the high-end segment of China’s electronic information industrial chain.

From 2012 to 2021, the added value of China's electronic information manufacturing industry has achieved an annual growth rate of 11.6 percent, with operating income increasing from 7 trillion yuan ($999.6 billion) to 14.1 trillion yuan. Intensive technological innovation has emerged in fields such as integrated circuits, new displays, and fifth-generation mobile communications. The innovation iteration of products such as basic software, industrial software, and emerging platform software has continued to accelerate.

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