Promoting Technological Upgrading in Strategic Industries: Chinese State-Directed Techno-Capitalism in the Semiconductor Industry

Scholarship on new state capitalism posits that states have become increasingly visible in advancing national strategic objectives. Nevertheless, further research is needed to delineate the new extent and forms of state functions. In response, this article examines how states and state capital have been reconfigured in the national pursuit of vital resources. Drawing on analytical concepts from the new state capitalism literature, we propose a framework of state-directed techno-capitalism to explain unique institutional features and state–capital relations that have emerged as the Chinese party-state tackles technological bottlenecks in the semiconductor industry. These include a state-led fund with multi-scalar governance structures, financialised features, and cross-sectoral investors. By analysing several state projects, we also account for factors that mediate the relationship between state capacity and development outcomes. This study contributes to the understanding of state capacity and the forces surrounding state transformations that promote technological upgrading in China.