Banca March | China has launched the third phase of the “Big Fund”, amounting to 344 billion yuan ($47.5 billion) dedicated to the development of semiconductors. This phase brings together the largest amount of the three phases: the first phase of 138.7 billion yuan in 2014 and the second phase of 204 billion yuan in 2019. The aim of this fund is to build an independent supply chain, after years of US sanctions on the import of these components and increasing restrictions on access to this technology. The “Big Fund” has provided financing to China’s two largest chip foundries, Semiconductor Manufacturing International and Hua Hong Semiconductor, as well as to flash memory manufacturer Yangtze Memory Technologies and a number of smaller companies. The fund’s largest shareholder is China’s Ministry of Finance (17%), as well as the local governments of Shenzhen and Beijing and state-owned banks.
In other news from China, the country has made the largest local government bond issue in the last seven months. In total, it amounts to 790 billion yuan ($109 billion). In the month of May, the sale of these bonds, added to last Friday’s special bond issuance ($138 billion), demonstrates China’s strongest bond issuance in seven months, with a total of 790 billion yuan ($109 billion). In May, the sale of these bonds, coupled with last Friday’s $138 billion special bond issue, demonstrates the Chinese government’s determination to boost the economy through fiscal stimulus.
