POLITICAL ECONOMY OF THE SEMICONDUCTOR INDUSTRY AND THE RECENT LIMITED DEVELOPMENT OF THE PEOPLE’S REPUBLIC OF CHINA

Abstract

Since China’s entry into the World Trade Organization (WTO) in 2001, the import of semiconductors components has grown rapidly to supply domestic demand and the export processing industries of foreign transnationals based in mainland China. It thus became the most imported product by the country since mid-2010. Since 2014, the Chinese central government has implemented numerous policies to foster and develop the domestic semiconductor industry to achieve technological catch-up and reduce dependence on foreign technology imports. Despite Beijing’s efforts, the industry has shown little progress. In conclusion, the structural weakness of the Chinese semiconductor industry, volatile market dynamics, and especially international geopolitical issues negatively impacted the recent development of the Chinese industry.