Chinese Regulator Accuses Chip Tycoon Zhao Weiguo of Corruption

Image copyright: Linkedin [via BBC]

The Facts

  • China's Central Commission for Discipline Inspection (CCDI) has placed Zhao Weiguo, the former chairman of computer chipmaker Tsinghua Unigroup, under investigation, alleging he "took the state-owned company he managed as his private fiefdom."

  • The government invested billions in Tsinghua projects that ultimately stalled or failed, however the CCDI says Zhou provided his friends and family with successful businesses to run and paid "significantly above market prices" for their goods and services.

The Spin

Pro-China narrative

As Beijing looks to combat the US's semiconductor trade war, Zhou tried to take advantage of the growing industry and his state-backed company's profits. There is no room for such selfish corruption as this at a time when the nation is looking to defend itself economically and technologically against the encroaching western threats of sanctions and boycotts.

Anti-China narrative

As it can no longer rely on technology produced in the US, China is now discovering that throwing money at the chip industry will not be enough to rival the semiconductor production of its western counterparts. While these could be cases of legitimate corruption deserving of prosecution, the significant possibility that these executives simply fell out of Pres. Xi's favor as Beijing continues to flounder over the problem of chip production cannot be ignored.

Nerd narrative

There is an 87% chance that Shanghai will continue to subsidize up to 30% of investment in semiconductor materials and equipment projects within the city until 2024, according to the Metaculus prediction community.

Establishment split



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