Junko, i am also not convinced that China will be spending $10B per year for 5-10 years. Its just too much given the spending of others in Semiconductor, but if China is serious about spending whatever money to develop ecosystem for Semiconductor then its good for overall industry as you have rightly mentioned a quote in the article that semiconductor is base for all the electronic development.
Well, Kris, as I noted in the story, whenever local governments and bureaucrats are involved, there are often corruption issues.
This is how it was explained to me -- in terms of how corruptions could occur.
You [local government officials or whoever in the position to distribute the money] do a favor to someone you know by enabling investment. In return, you feel you are entitled to pocket some money from the deal, because you enabled it! And if there more deals to be made, there will be more opportunities for you to profit from it.
Hopefully, this idea of "set up a fund and let professional investors place bets" would work.