Despite US trade restrictions, Shenzhen has increased its efforts to further China's "hi-tech self-sufficiency drive" by building an international procurement network for semiconductors and other electronics products.
New Trade Market
The new Electronic Components and Integrated Circuits International Trading Centre Co. is headquartered in the city's Qianhai economic zone.
In a report by South China Morning Post (SCMP), several shareholders announced on Tuesday, Jan. 3, that the company had registered with local market authorities and it already received its business license on December 30, 2022.
The initial capitalization of this trading center is 2.1 billion yuan ($304 million).
It is funded by 12 state-owned entities and private companies, the largest of which are the telecommunications equipment manufacturer China Electronics Corp. (CEC) and the local government financing Shenzhen Investment Holdings.
Shenzhen Investment put in 760 million yuan ($110 million) to get a 35.7% ownership in the trading center, while CEC and its subsidiary China Electronics Information Service Co. each committed 380 million yuan ($55 million).
Aside from them, the electronic company Shenzhen Huangqiang Industry Co. owns 3.5%, and the chip maker Shannon Semi owns 1.7%.
Aspirations for Shenzhen
The National Development and Reform Commission (NDRC) and the Ministry of Commerce first announced the creation of this trade center in January of last year. It is anticipated to attract many international manufacturers and distributors in the semiconductor and electronics sectors.
According to the NDRC's plan, Shenzhen will also serve as a significant hub for sourcing, software development, branding, and training, among other services.
President Xi Jinping personally selected the said city in 2020 to become a world-class technology powerhouse and model for structural policy.
Several of China's most successful digital businesses are headquartered in Shenzhen, the country's equivalent of Silicon Valley. These include the gaming and social media powerhouse Tencent Holdings, the drone industry's DJI, and the telecommunications equipment giants Huawei and ZTE Corp.
In addition, Longhua Science and Technology Park is home to a significant chip facility operated by SMIC and the biggest manufacturing complex on the mainland operated by the Taiwanese corporation Foxconn Technology Group.
Chip War Against the US
Shenzhen's ambition to drive reforms in accordance with China's tech self-sufficiency goal underscores Xi's confidence that the city would become a major economic engine for the Greater Bay Area development zone.
This comes as US restrictions on China's semiconductor sector have been intensified, undermining Beijing's hopes for China to become technologically independent.
Last month, the US government put over 30 Chinese companies on its trade blacklist, including the manufacturer of flash memory chips, Yangtze Memory Technologies Co.
The move came after Washington expressed worry that Beijing was utilizing commercial technologies to modernize its military.
That was a big step forward from the prior targeted restrictions on specific mainland businesses like Huawei Technologies Co. and Semiconductor Manufacturing International Corp. (SMIC).
