The resources for subsidies come from the taxpayer. Plus how you and who you subsidize becomes political. Lots of complications.
Who gets subsidized is indeed political, but I don't see a way to sidestep that since there's centralization as soon as you take action to prevent the currency from deflating.
The federal reserve, on the other hand, controls interest rates and other mechanisms which actually result in money "bring created" for practical purposes.
Or the mechanisms themselves might not actually have to be changed if we could cast off this myopic political red herring about "the deficit". What we perceive as the balance sheet of "the government" needs to include The Fed, Fannie/Freddie, etc. Treasuries owned by other countries are the equivalent of a big savings account. Treasuries owned by the Fed are the same as all the other other debt owned by the Fed - monetary creation / monetary inflation.
One way could be to send the message to the market that a certain area is strategically important and any startups will have access to extremely cheap loans and not have to worry about natural resources or personel.
Then follow up on those promises, take a step back, watch the Cambrian explosion that follows and when the businesses seems to have grown legs simply scale back funding and watch them fight it out. One could even say that is exactly what has happened in the world several times over. It is not unique to China.