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Former Head of China’s ‘Big Fund’ Management Company Is Under Investigation

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The former head of the management company of China’s National Integrated Circuit Industry Investment Fund was placed under investigation after a string of Chinese chipmakers went broke.

According to a July 15 announcement by the Chinese Communist Party (CCP)’s Central Commission for Discipline Inspection, Lu Jun, the former deputy director of the Fund Management Department at China Development Bank (CDB), is being investigated for alleged “serious violations of discipline and law.”

Lu was born in 1968 and is a native of Jiangsu Province. He has long worked at CDB and other related enterprises, with his highest rank being at the bureau level. Lu resigned from CDB in September 2021.

Lu is best known for his work in China’s chip industry, and he helped manage the CCP’s National Integrated Circuit Industry Investment Fund. While working at CDB, Lu also held positions at three state-owned chip-related companies: Sino-IC Capital, Semiconductor Manufacturing International Corporation (SMIC), and Xinxin Financial Leasing.

The National Integrated Circuit Industry Investment Fund is known as the “Big Fund” in China. The first phase of the fund was established in September 2014 with a scale of more than 130 billion yuan (about $19 billion). The fund’s investment plan spans a total of 15 years, with three phases: an investment period from 2015 to 2019, an exit period from 2019 to 2024, and an extension period from 2025 to 2030.

The second phase of the Big Fund was established in October 2019 with registered capital of more than 204 billion yuan (approx. $30 billion). The fund fully entered the investment period in 2021.

The Big Fund has a two-tier management structure according to what is described as “the principle of separate ownership and management rights,” with Sino-IC Capital being the sole manager entrusted to undertake the fund investment business.

Lu served as the president of Sino-IC Capital since its establishment in 2014 and was involved in significant investment operations until he left the company in late 2020. Lu also served as the Big Fund’s director during the first and second phases.

Before Lu took office, other Big Fund executives have been sacked. Gao Songtao, a former vice president of Sino-IC Capital, was also investigated in November 2021 on suspicion of “serious violations of discipline and law.”

China’s Chip Technology

Chips are at the core of modern industry. However, China’s current chip technology is still far from the international mainstream. Under pressure from U.S. sanctions, the CCP began a “Great Leap” forward-style campaign to make chips a few years ago.

According to a survey by state-run China Economic Weekly, over 58,000 new companies related to integrated circuits were created in China from Jan. 1 to Oct. 27, 2020—about 200 new enterprises per day. Even companies with no experience, technology, or talent are now joining the industry.

In July 2021, Tsinghua Unigroup, known as the “aircraft carrier” of China’s chip industry, declared that it couldn’t pay its maturing debts and went into bankruptcy reorganization. In 2015, the company’s chairman, during a trip to Taiwan, made the grandiose statement that he would buy Taiwan Semiconductor Manufacturing Co.

Seven Chinese wafer manufacturers—GlobalFoundries in Chengdu city, Hongxin in Wuhan city, Quanxin in Ji’nan city, Dehuai in Huai’an city, Jiangsu Advanced Memory Semiconductor in Huai’an city, Dekema in Nanjing city, and Kuntong in Shaanxi Province—had their capital chains broken and collapsed between 2019 and 2020, according to Chinese integrated circuit portal They failed to produce “even a single wafer,” the report said.

However, the CCP’s state-owned investment agencies have poured more than 10 billion yuan (about $1.5 billion) into each of these enterprises, including 128 billion yuan (about $19 billion) into Wuhan Hongxin Semiconductor Manufacturing Corporation alone.

Shawn Lin


Shawn Lin is a Chinese expatriate living in New Zealand. He has contributed to The Epoch Times since 2009, with a focus on China-related topics.

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