China’s chip industry seeks more state support for AI dominance

Scholars and entrepreneurs in semiconductor sector urge Beijing to regulate prices of AI computing power, leverage strategic raw materials and fund tech solutions for self-reliance

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A worker handles materials at a factory producing semiconductor chips for export in China’s Shandong province. Photo: AFP

Ann Caoin Shanghai

Published: 7:00pm, 9 Mar 2026

Representatives of China’s semiconductor industry are calling for stronger state backing in artificial intelligence chips and critical materials, aiming to fast-track core technology breakthroughs.

During last week’s “two sessions” – the annual meetings of China’s top legislature and advisory body – scholars and entrepreneurs in the semiconductor sector urged Beijing to leverage the nation’s advantage in strategic chip raw materials and accelerate the commercial application of AI chips to secure a lead in the global tech race.

Zhang Yunquan, a professor specialising in high-performance computing at the Chinese Academy of Sciences, said the government should take a greater role in regulating the prices of AI computing power, which is delivered by chips running in data centres for modern AI workloads.

“Competition among companies is fierce, with most resorting to low-price tactics, leading to ‘involutionary’ competition,” he told the South China Morning Post during the sessions, referring to cutthroat, low-quality price competition – prevalent in sectors ranging from electric vehicles (EVs) to food delivery – that Beijing has vowed to combat.

Zhang, a member of the Chinese People’s Political Consultative Conference, suggested that the government could issue pricing guidelines on AI computing power. He proposed that the country establish a “unified trading market where computing power across the country can be traded uniformly”, making computing power “a commodity like electricity or oil”.

Hao Yue, a deputy to the National People’s Congress (NPC) and vice-president of Xidian University in Xian, Shaanxi province, highlighted China’s “industrial leverage” in rare earth elements.