The Chinese Academy of Sciences' Institute of Computing Technology has been showing off a new processor that it plans to roll out next year.

The Godson-3 is the third iteration of the processor line from the Dragon family. The quad-core processor includes an x86 emulator allowing it to use Western commercial software.

Zhiwei Xu, deputy director of the Institute of Computing Technology, told the MIT Technology Review: "Twenty years ago in China we did not support R &D for microprocessors.

"The decision makers and [Chinese] IT community have come to realise that CPUs are important."

China has been increasing tax breaks for processor manufacturers and boosting public R&D spending in an effort to build its own processor business.

This is in part inspired by US regulations that forbid the export of the latest processors to China.

"Like America wants to be energy independent, China wants to be technology independent," said Tom Halfhill, an analyst at research firm In-Stat.

"They do not want to be dependent on outside countries for critical technologies like microprocessors, which are nowadays a fundamental commodity."

The Godson-3 chip will be slower than pure x86 processors because the emulation will slow down computing instructions.

It is also based on 65-nanometre technology when most modern AMD and Intel chips are using smaller 45nm transistors.

Nevertheless Xu said that the processor would include power management features seen in US chips, such as reduced power running and the shutting down of selective cores to save on power.