China Set to Benefit from S. Korea-Japan Dispute
With the South Korean semiconductor industry facing a crisis due to Japan’s export curbs on core semiconductor materials, the Chinese government is encouraging foreign investment in 5G-related sectors and the manufacturing industry, including semiconductor equipment manufacturing, according to a study from a national research institute.
The Chinese government is also planning to abolish regulations that fetter foreign investment by the end of this year and continue to simplify evaluation and approval procedures. Chinese media outlets are releasing reports on the new window of opportunities opening for Chinese semiconductor companies following the dispute between South Korea and Japan.
The Chinese government announced its 2019 foreign investment negative list, which is a guideline of foreign investment, and the pilot free trade zone (FTZ) negative list on June 30, according to a report released by the Korea Institute for International Economic Policy (KIEP) on July 28.
Lee Han-na and Kim Hong-won, researchers at the Chinese economy unit at KIEP, said, “The latest negative lists were unveiled right after Chinese President Xi Jinping stressed at the G20 summit on June 28 the need to expand the opening of the country. They will take effect on July 30.”
The number of the items in the foreign investment and the FTZ negative lists fell by eight each to 40 and 37, respectively. In FTZs, the agriculture and fishery, printing, and culture and entertainment industries have a higher level of openness than the national average.
The 2019 list of industries where foreign investment is encouraged has included the 5G-related sectors and the manufacturing industry, including semiconductor equipment manufacturing, as well as industries based on regional characteristics. The researchers said, “In particular, the list includes 308 items in the 5G-related sectors, which shows the Chinese government’s intention to commercialize 5G networks. It also includes new industries, such as semiconductor chip packaging, cloud computing, industrial robots, new energy vehicles, core components for smart vehicles, which is designed to encourage investment in new technologies.”