That's not entirely accurate. The article says that "state-run and private manufacturers are unwilling to invest in research and development because, in most ca

That's not entirely accurate. The article says that "state-run and private manufacturers are unwilling to invest in research and development because, in most cases, it won’t bring profits and extra market share, owing to the lack of protection for intellectual property and rampant plagiarism by other competitors" – i.e., it is not just a public funding problem. It goes on to state that the government has invested in "a RMB$60 million program four years ago to facilitate the research and development of strategic industrial materials such as high-quality steel so as to reduce the country’s reliance on foreign imports, because it is not only an industrial issue but also a national security concern." And then note that, "four years have passed, and the program seems to have achieved nothing." Clearly there have been some very successful funding initiatives in China, but clearly others have not panned out. I think it's fair to say that time will tell whether the semiconductor investment pays off.