Xu Jinghong, chairman of Tsinghua Holdings, has said the Chinese state-owned technology company plans to invest $7.5 billion in research and development (R&D) over the next five years. A substantial part of this R&D fund will go to the chip-making division of Tsinghua Unigroup. The move comes as China aims to compete with global chip makers.

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Xu made the announcement on the sidelines of World Economic Forum program in Tianjin on Sunday. He added that Tsinghua Unigroup aims to become the world's No. 3 chip manufacturer after Intel Corp and Samsung Electronics Co. To achieve this, the company is preparing to buy into two Taiwanese chip companies for nearly $1 billion dollars. However, both deals have come under the shadow of uncertainty following recent strains in cross-strait relations.

Xu revealed that Tsinghua is organizing a special fund of $1 billion to facilitate the commercialization of new technology. Additionally, the company plans to set up 1,000 start-up incubation centers across 100 Chinese cities in a bid to promote start-up culture in the country.

Xu also took a swipe at the government for being too slow on the front of economic reforms, adding that the old investment-led growth model has been producing diminishing returns and fueling debt.

"We need to step up reform. We should let the market decide how resources are allocated. We need a fair market, and improved legal environment," he said.  

Xu also urged the government to support new industries financially and to restructure those facing problems due to over-production.

Tagschina, Tsinghua Holdings, Tsinghua Unigroup, Xu Jinghong