In recent years, as a new wave of technological revolution has gradually converged with industry demand, emerging industry projects have sprung up like mushrooms after rain, gradually becoming a new driving force behind GDP growth. Such projects not only boast broad market prospects but also attract capital financing and fiscal support. Take the currently booming new energy vehicle, robotics, and integrated circuit industries as examples: companies in these sectors are not only highly sought-after within their industries but are also highly favored by local governments in investment promotion circles.

However, beneath the surface of this bustling boom in project signings , news of projects becoming abandoned, halting production, or facing labor disputes inevitably surfaces. While this prompts lamentations about the industry’s “overheated hype,” it also raises concerns about the current reality of “bad money driving out good” within these emerging industries.

A Rush to Join the Frenzy: Concerns Amid the "Heat"

According to data from the National Bureau of Statistics, the value added of China’s high-tech manufacturing sector grew by 22.6% year-on-year in the first half of this year . Among these, the output of new energy vehicles, industrial robots, and integrated circuits increased by 205.0%, 69.8%, and 48.1% year-on-year, respectively, with an average growth rate exceeding 30% over the past two years.

In recent years, driven by the goal of tackling core technologies in key sectors and resolving “chokepoint” challenges, the new energy vehicle, industrial robot, and integrated circuit industries have witnessed an unprecedented investment boom.

However, while breakthroughs in core technologies were being made, the sector was also infiltrated by fraudulent projects—such as “cars that run on water alone” and “hundreds-of-billions-yuan investments with no real capital”— which ultimately left a “mess” in their wake, an outcome no one could have foreseen.

From an industry perspective, while the number of registered companies is vast, very few possess core technologies; although product varieties are numerous, only a handful are internationally competitive. New market entities are emerging rapidly, and crude, small-scale projects are flooding the market. These factors have directly fueled the industry’s artificial boom and have become significant obstacles to its development.

However, the industry’s artificial boom stems not only from companies simply following the trend but, more importantly, from the fueling role played by capital markets and local governments. Capital markets have shown local governments the positive impact the industry can have on industrial clusters and local finances, prompting local governments to extend “olive branches” to collaborate with companies. The comprehensive incentives and subsidies they offer have, in turn, bolstered investors’ confidence in these enterprises.

Consequently, this artificial boom has quietly taken hold, and cases where funds are squandered, people flee, and projects fall through have become all too common. Next, let’s delve into specific cases to analyze the root causes of this overheated market.

Is It a Genuine Boom or Just a Bubble?

"Three Nos and One Shortage": Low-Quality Projects

In recent years, many projects in these sectors were nothing more than “paper tigers” or “PPT-based” ventures—exemplifying the “three lacks and one deficiency”: no funding, no prototype vehicles, no technology, and even a lack of a core team. Faced with issues such as immature technology, high raw material costs, and gaps in the core supply chain, these projects struggled to gain traction from the outset. Against this backdrop, when faced with challenging projects, many companies either chose to abandon them or settled for second-best alternatives. This led to an increasing number of projects clustering in low-level sectors, ultimately rendering all innovation nothing more than empty talk.

"Blood Transfusion"-Style Support and Policy Benefits

Regardless of the industry, as soon as the government prioritizes it, support and subsidies are immediately rolled out. But is this simplistic “assistance” truly effective? The answer is no. Take the current robotics industry, for example : while it appears to be booming on the surface, it is plagued by the issue of reliance on foreign suppliers for core components . Furthermore, policy favoritism has, to some extent, triggered homogeneous industrial competition across regions. On one end of this competition lies the race among local governments to demonstrate their achievements, while on the other end lies the competition among enterprises vying for government subsidies.

When the tide recedes, the true nature is revealed

For some projects, the primary driving force comes from the government. The government has rolled out numerous incentive policies and directly injected massive funds; many projects are government-led and government-funded, which has given enterprises opportunities to exploit loopholes and engage in speculation. Previously, “unreliable” car-making companies became showcase cases for investment promotion in certain regions. The founders of these companies would either sign massive contracts with local authorities or join them in breaking ground with shovels, claiming to lay the foundation for investments worth billions.

Extinguishing this artificial boom is imperative

Last October, the National Development and Reform Commission (NDRC) sounded the alarm regarding chaotic practices in the integrated circuit industry, such as local governments blindly launching projects. In some cases, project construction has stalled and factory buildings stand vacant, resulting in a waste of resources.

Moving forward, adjustments must be made by both the government and enterprises, focusing on key factors such as technology, capital, and talent. Only then can we effectively prevent various hidden risks and irregularities from occurring, thereby avoiding the industry’s demise due to this artificial boom.

Technology Is the Key, Not Winning Through Low Prices

As a high-tech industry, it requires massive upfront investment, and it is certainly not a sector where results can be seen immediately after investment. Throughout the development process, the only factor capable of mitigating the industry’s “artificial boom” is technology itself, not the so-called “winning through low prices.”

Companies must "hone their core competencies" by understanding the laws of industrial development, enabling them to strategically select niche investment areas during planning. At the same time, by mastering their own core technologies and ensuring sufficient market demand, a company’s technology will inevitably be highly valued at critical junctures along the industrial chain.

The Market Attracts Capital, Not Government Subsidies

In the past, capital introduced a misconception to the industry: that whoever raised the most funding was likely to win in competition. Little did people realize that this was a “trap”; what capital should truly focus on is whether a company can deliver results. The government must adopt an attitude of “what needs to be cut will eventually be cut” toward industrial development. Relying solely on comprehensive subsidies is absolutely insufficient; instead, the policy and market environments must be optimized to enable companies to grow rapidly.

Of course, we cannot deny that capital financing and government subsidies have provided a boost to enterprises. This is inevitably a double-edged sword; only when deployed in the right places can it become a powerful tool for enterprises to “cut through thorns and overcome obstacles.” If an industrial market can continuously attract capital, the presence or absence of government subsidies becomes irrelevant.

The tide will inevitably recede; it is not a bubble masking reality

It is no coincidence that every industry, lured by immense market potential, experiences a rapid surge in investment fervor, triggering a scramble for capital and government support while capturing widespread attention. We must acknowledge that policy support and fiscal subsidies are essential for the development of new sectors . However, as the battles over financing and subsidies come to an end, the market will undergo a process where “only when the tide goes out do we see who’s been swimming naked,” thereby achieving “survival of the fittest.”

Of course, if these enterprises thrive, the resulting industrial agglomeration effect will anchor this industry—which holds the greatest market potential for the future—in urban planning blueprints, transforming it into a city’s calling card for attracting investment and talent.

Seeking Symbiotic Development, Not Going It Alone

Industrial clusters and supply chains have increasingly become key drivers of industrial development. Smaller domestic enterprises must engage more actively with the market, identify their competitive positioning within the broader supply chain based on market demand, and seek breakthroughs at specific points. More importantly, as industrial clusters evolve from nothing to something, and as the industry shifts from dispersion to concentration—with supply chains continuously extending—it is essential to introduce foreign capital and technology to form powerful alliances, thereby gradually expanding into international markets.

Indeed, no country in the world can single-handedly complete the entire semiconductor industry chain— neither China nor the United States. In this highly globalized and specialized sector, entities across the entire industrial chain must consistently adhere to the principle of open development, actively leverage global resources, and deeply integrate into the global industrial ecosystem.

Conclusion

The "crossing the river by feeling the stones" approach to subsidies has indeed allowed many "speculators" to amass illicit wealth, but the artificial fervor ignited by policy must ultimately be extinguished by the cold water of policy.

These industries feature long supply chains and complex processes; they cannot be transformed overnight. It is not a matter of declaring a breakthrough today and catching up tomorrow. What we must absolutely discard are sensationalist headlines like “surpassing NVIDIA” or “rivaling Tesla.” Capital, government, and enterprises must recognize the overarching trends of industry development, remain vigilant against the “artificial hype” underlying industry prosperity, shed their impatience, and prepare for a “long-distance race.”