Shortly after the global success of DeepSeek’s latest artificial intelligence reasoning, China’s main economic authorities promised to create a state -supported fund to support technological innovation.
The “state-of-the-art capital orientation Fund” will focus on cutting-edge areas such as artificial intelligence, quantum technology and hydrogen energy storage, Zheng Shanjie, China’s state-owned economic planner, chief of reporters on Thursday (6), on the sidelines of the annual meetings of China’s national legislative and advisory agency.
The fund is expected to attract almost 1 trillion yuans ($ 138 billion) in capital over 20 years of local and private sector governments, Zheng added, chairman of the National Development and Reform Commission.
Chinese leaders see cutting -edge chips, quantum computing, robotics and went as essential to boosting economic growth and updating manufacturing. But China is facing increasing pressure from US technological restrictions.
Zheng adopted a challenging tone at the news conference, praising China’s rapid development in microchips and AI language models, as well as industrial and humanoid robots.
“Scenes previously seen only in science fiction are now coming true. We are moving firmly toward the global borders of technology and innovation, ”said Zheng.
“This proves that the attempt to suppression and block for certain forces only serves to accelerate our impulse for independent innovation,” he added in an apparent reference to the United States.
Deepseek, a private company whose R1 language model stirred global action markets when it was launched in January, was almost able to match the capabilities of its rivals-including OpenAi’s GPT-4, Google’s goal, and Google Gemini-but a cost fraction.
This surprised observers because the US has worked for years to restrict the supply of high -power AI chips to China, citing national security concerns.
This means that DeepSeek was allegedly capable of reaching its low cost on relatively subpotent AI chips.
On Wednesday, Chinese Premier Li Keqiang promised to “foster emerging industries and future industries” by delivering the government’s annual work report.
Li promised to establish a mechanism to increase financing for industries such as biofabrication, quantum technology, was incorporated and 6G technology.
After years prioritizing technological innovation over domestic demand, China’s leaders also began to show more commitment to strengthening consumption as their main political task.
The Chinese government will soon reveal a “special action plan to boost consumption,” said Zheng, the economic employee.
Last year, despite a stimulus in September, much of the country’s impetus of growth came from exports, which boosted China’s commercial surplus for a high record of just under $ 1 trillion.
This force attracted the wrath of US President Donald Trump, who this week doubled US import tariffs over 20%Chinese products.
China’s domestic consumption as a portion of the country’s Gross Domestic Product (GDP) was only 39% in 2023, the latest year for which there was data available, according to Macquarie Group, an investment bank.
This compares to 49% for South Korea and 55% for Japan, two Asian countries with already high savings rates, and 68% for the United States.
“Beijing is determined to find internal strength amid the growing external uncertainties. China is launching special actions to boost domestic consumption, ”wrote HSBC economists led by Jing Liu in a research note on Wednesday.
As part of these efforts, China raised its budget deficit to about 4% of gross domestic product, the Premier LI announced in its work report. It was the highest level in decades and part of a plan to increase spending to combat the impact of US tariffs.
He also indicated that the government’s title issuance quota would increase by more than 25% from last year to 6.2 trillion yuans ($ 855 billion), divided between local and central authorities.
Special titles issued by local governments will be used for infrastructure investments and to help the real estate in difficulty, while central authorities would reserve about 300 billion yuans (US $ 41 billion) to spend on consumer subsidies for a popular consumer cars and electronics program, called “money per scan”.
The key to the government’s success will be whether it will be able to revive the “animal spirit” of China’s private entrepreneurs, who will need to promote technological innovation while Beijing prepares for more US restrictions.
Last month, Chinese leader Xi Jinping received the country’s leading technology executives in the capital, where he proclaimed it was a “noble time” for private companies “to give their most in their abilities.”
Private companies contribute over 60% to China’s GDP and over 80% of employment, although they are overshadowed by the state sector in size. However, many companies, particularly in the technology sector, are still recovering after severe regulatory repression that lasted more than three years.
The Promotion of Private Economy Promotion Law, which should be discussed during the current political meetings of “two sessions”, would ensure that companies were legally supported and protected, according to Yang Decai, director of the Institute of Private Economic Research at the University of Nanjing and a member of a Legislative Advisory body.
He “responds very promptly and effectively to some questions with which the private sector is concerned, such as property rights protection, fair competition,” he told journalists on Tuesday at the Great People’s Hall in Beijing.
“This has driven the trust of private companies and our expectations for the market, which is of great importance to the stable growth of the Chinese economy.”
