According to insiders, China wants to expand domestic semiconductor production in response to the American embargo on high-performance chips.
Aid and tax breaks worth the equivalent of 136 billion euros are planned, said three people familiar with the matter on Tuesday.
It would be the largest package in more than five years.
The majority of the subsidies are to be used to buy chip production equipment in order to modernize the domestic industry, the insiders said.
Another goal is increased research and development.
With these measures, the government in Beijing wants to make itself less dependent on imports.
The information office of the State Council could not immediately be reached for comment.
The US wants to restrict China's access to high-performance chips for applications such as artificial intelligence.
According to a media report, Japan and the Netherlands want to join the export restrictions.
At the same time, Western countries are increasingly investing in chip production in their own country.
The US is spending $52 billion on this.
The EU created the €15 billion “European Chips Act”.
Huge new semiconductor factories are being built in Magdeburg and Dresden.