China's Regulatory Crackdown On Its Tech Sector Takes New Twist

• China is after the head of its leading state-backed chip investment fund, shortly following a similar probe into a former executive linked to the fund, Reuters reports.

• China suspected Ding Wenwu, the head of China Integrated Circuit Industry Investment Fund, or the "Big Fund," of severe law violations and was under disciplinary review.

• In July, China placed Lu Jun, former head of investment firm Sino IC Capital, which managed the Big Fund, under investigation, citing a "serious violation of discipline and the law."

• China launched the Big Fund in 2014 to boost its semiconductor industry.

• The Big Fund raised 138.7 billion yuan ($20.54 billion) for its first and 204 billion yuan for its second fund.

• The fund financed Semiconductor Manufacturing International Corp, China's leading chip fab, Yangtze Memory Technologies Co Ltd, a flash memory maker, and several smaller companies and funds.

• China also probed IT Minister Xiao Yaqing for "violation of discipline and law."

• Xiao's ministry regulated the domestic heavy industry, automobile, telecom, and electronics sectors, overseeing companies from Huawei Technologies Co to Xiaomi Corp (OTC: XIACY).

• Simultaneously, Chinese tech companies, including Alibaba Group Holding Limited (NYSE: BABA), were amid steps to amend their position following a sweeping regulatory crackdown on the sector.

• Meanwhile, the U.S. Senate approved a $280 billion bill to drive the U.S. semiconductor industry, reducing its dependence on its Asian counterparts like China.

• The U.S. also adopted measures and convinced its allies to restrict cutting-edge semiconductor tech inflow to China.

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