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Beijing is proposing to buy more semiconductor chips from the United States, according to media reports, highlighting the challenges China faces in its plan to make advanced semiconductors in-house. Industrial policies such as "made in China 2025" have attracted foreign concern, but the country has made little progress in high-tech chip production, leaving big questions over whether such measures will work.

The Wall Street journal reported last week that China has proposed to U.S. trade negotiators to raise the value of U.S. imports of semiconductors to $200 billion over the next six years, or an average of $33 billion a year over the next few years, from about $6 billion in 2017, in an effort to quell trade tensions. This is partly by moving the final assembly and testing line from a third country to China, but may also require an increase in actual chip purchases.

Such a move is a far cry from Beijing's vow to make domestically produced advanced chips, according to a Reuters opinion piece. Officials have set numerous targets for the domestic semiconductor industry in recent years, spending as much as $150 billion on official and other investments in the sector, according to a 2014 analysis by McKinsey based on China's official policy blueprint.

Despite such huge investment, China's semiconductor industry has so far made little progress. Of course, China already produces a lot of semiconductors, worth nearly $80 billion last year, according to Deloitte, but almost all of the most advanced semiconductor technology must come from foreign suppliers.

Analysts estimate China is five years behind the U.S. in semiconductor chip technology. In other key areas, such as some types of semiconductor processing, it is up to 15 years behind. State-owned semiconductor manufacturing international corp. 's (SMIC) foundry remains far behind global foundry leader Taiwan semiconductor manufacturing corp. (TSMC) and has been unable to close the technology gap.

China semiconductor industry indeed some bright spots, such as telecom equipment giant huawei, a subsidiary of haisi semiconductors (HiSilicon), design of mobile phone chips is impressive, and many of the semiconductor industry analysts believe that over time, the technical level of the Chinese in the coming decades will eventually catch up, but it is roughly because Chinese consumers have a big appetite for the consumer electronics device.

However, to succeed in the global semiconductor industry, soft power such as talent and intellectual property is as important as financial resources. As U.S. trade negotiators press Beijing to stop market-distorting subsidies, China's ambitious plan to prop up its industry with huge amounts of money may fall short of its goals. Semiconductors are a case in point.