Published by ChinaMNC · Baqiao
China's New Policy on 'New Quality Productive Forces': What Foreign Founders Need to Know
A practical guide for foreign founders on China's latest policy to develop 'new quality productive forces,' covering innovation, industrial upgrading, and business opportunities.
China's Push for 'New Quality Productive Forces': A Guide for Foreign Founders
The Chinese government has issued a major policy document on developing “new quality productive forces,” a concept that emphasizes innovation-driven, high-quality growth. For foreign founders looking to register or operate a company in China, this policy signals key directions and opportunities. Below is a summary of the main points, based solely on the official document.
Overall Vision
The policy calls for guiding economic development with a new development philosophy, focusing on innovation, reform, and因地制宜 (adapting to local conditions). It aims to coordinate the roles of government and market, and to pursue high-tech, high-efficiency, and high-quality growth. The core marker is a substantial increase in total factor productivity, driven by scientific and technological innovation, resource reallocation, and industrial upgrading. The goal is to create production relations that better fit these new forces and foster an ecosystem conducive to deep integration of technological and industrial innovation.
Key Areas for Foreign Founders
The document outlines specific tasks that may affect foreign-invested enterprises. Here are the highlights:
1. Strengthening Original and Disruptive Technological Innovation
China will focus on strategic, landmark products and organize major science projects. It will support both goal-oriented and free exploration in basic research, build major science infrastructure, and promote breakthroughs in original theories and key technologies. Foreign founders in deep tech may find opportunities in these prioritized areas.
2. Breaking Through Key Core Technologies
Using the new national system, China will implement actions for high-quality development of key manufacturing supply chains and industrial innovation projects. Policies for first-of-their-kind major technical equipment and first-batch materials will be applied to drive technology iteration. This could benefit foreign firms involved in advanced manufacturing.
3. Coordinating National Strategic Science and Technology Forces
National laboratories will play a bigger role in major projects and platform building. Reforms will optimize the positioning of research institutes, universities, and leading tech enterprises. Salary systems for universities and research institutes will be gradually reformed to incentivize innovation. Enterprises are encouraged to take the lead in national science tasks. Foreign founders may collaborate with these entities.
4. Enhancing Enterprises' Role as Innovation Subjects
China will increase inclusive incentive policies, establish a corporate R&D reserve system, and raise the additional tax deduction ratio for R&D expenses. Enterprises meeting national strategic needs can have their R&D projects elevated to national projects. Private enterprises capable of leading major technical breakthroughs will be supported. The policy also supports specialized and sophisticated SMEs. Foreign-invested enterprises can potentially access these incentives if they qualify.
5. Accelerating Commercialization of Scientific Results
The policy leverages China's mega-market to match technology with market demand. It includes demonstration actions for new technologies, products, and scenarios, and building proof-of-concept and pilot-testing platforms. Universities and research institutes are encouraged to license results to SMEs on a “use-first, pay-later” basis. Large enterprises should open their supply chains to SMEs. AI will be used to transform research paradigms. Foreign founders may find partners for technology commercialization.
6. Upgrading Traditional Industries
China aims to transform traditional industries with digital and green technologies. Key industries such as mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction will be upgraded to maintain global competitiveness. Actions include industrial base re-engineering, major technical equipment breakthroughs, and large-scale equipment renewal. Funding support and tax incentives for technological upgrades will be strengthened. Foreign firms in these sectors can participate in upgrading projects.
7. Cultivating Emerging Industries
China will develop strategic emerging industries such as next-generation information technology, new energy, new materials, intelligent connected vehicles, robotics, biomedicine, high-end equipment, and aerospace. It will build distinctive industrial clusters and avoid “involutionary” competition. Low-altitude economy and commercial space will be developed in an orderly manner under safety conditions. Foreign founders in these fields may benefit from cluster development and cross-regional cooperation mechanisms.
8. Forward-Looking Layout of Future Industries
The policy explores multiple technology routes, application scenarios, business models, and regulatory rules for future industries like quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G. A mechanism for investment growth and risk sharing will be established, with social capital encouraged. Foreign venture capital can participate in these emerging areas.
9. Deep Integration of Real and Digital Economy
China will improve data property rights, trading, and benefit-sharing systems. Pilot projects for data elements will be implemented. National data infrastructure will be optimized, and manufacturing digital transformation actions will be deepened. Projects like “East Data West Computing,” smart manufacturing, and industrial internet will be advanced. A nationally integrated computing network and national blockchain network will be built. Digital industry clusters with international competitiveness will be fostered. Foreign tech companies can plug into these digital ecosystems.
10. Full Implementation of “AI+” Action
AI will be applied to transform traditional industries, with a focus on intelligent connected vehicles, AI phones and computers, and humanoid robots. Breakthroughs in basic AI theory and core technologies will be pursued, with efficient supply of computing power, algorithms, and data. National AI industry application pilot bases and high-value scenarios will be established. A system for technology monitoring, risk warning, and emergency response will ensure AI safety. Foreign AI startups may find opportunities in these application scenarios.
11. Green and Low-Carbon Development
China will strengthen green manufacturing, green services, and green energy industries. Key industries will undergo green upgrades. Incentives for green consumption will be improved, and zero-carbon factories and parks will be built. The policy also includes fiscal, financial, investment, price, technology, and environmental policies to support green development. A carbon emission statistics and accounting system, carbon labeling, and carbon footprint management will be established. The national carbon market will be expanded, and green electricity certificate market unified. Financial institutions are encouraged to offer green financial products. Foreign green tech firms can participate in these initiatives.
12. Energy Revolution
Focusing on carbon peak and neutrality goals, China will develop advanced nuclear fission energy in an orderly manner, build a high-share renewable energy power system, and improve policies for renewable energy consumption. Major application scenarios will be demonstrated and promoted. International cooperation in energy will be strengthened. Foreign energy companies may find collaboration opportunities.
13. Deepening Reform for Science-Economy Integration
Science tasks will be deployed in major national projects as needed. Reforms will give researchers more rights to their scientific achievements and allow separate management of state-owned assets. Qualified state-owned enterprises can adopt various incentives. A unified national data market will be built, and technology markets will be improved. Foreign founders should be aware of these reforms that ease technology transfer.
14. Improving Market Regulation
Market access will be improved, and anti-monopoly and anti-unfair competition enforcement strengthened. Governance in AI and biology will be enhanced. Cross-departmental supervision will be innovated, with less on-site inspection and more data-driven regulation. Intellectual property protection will be strengthened with punitive damages. Tax systems for new business forms will be studied. Foreign firms should note the emphasis on IP protection and data-based regulation.
15. Increasing Financial Innovation Products
Angel investment, venture capital, and private equity will be encouraged and regulated. Government investment funds will play a guiding role. Policies will support long-term capital investing early, small, and in hard tech, growing patient capital. Banks are encouraged to develop loan products for new quality productive forces. Science and technology bond products will be enriched, and qualified tech firms supported for IPOs. M&A and equity incentive systems will be optimized. Insurance products covering the entire innovation chain and tech leasing will be explored. Foreign investors can participate in these financial channels.
16. Allocating Advanced Production Factors Globally
China will expand high-level opening up. Free trade zones are encouraged to attract advanced production factors based on their location and resources. Multilateral and bilateral cooperation mechanisms will be used to build science parks, “Belt and Road” joint laboratories, and international advanced technology application centers. China will lead and participate in international big science programs. Foreign venture capital institutions and international standards organizations are encouraged to develop in China. A efficient, convenient, and secure cross-border data flow mechanism will be established. This is particularly relevant for foreign founders considering setting up in free trade zones.
17. Cultivating Talent for New Quality Productive Forces
Reforms in education, science, and talent systems will be coordinated. Higher education will be expanded and upgraded, with new research universities and optimized subject settings. Modern vocational education will be developed with integrated work-study training. Talent will be nurtured in practice. Enterprises and universities are encouraged to jointly customize talent training. Master craftsmen and highly skilled talents can serve as vocational school instructors. Foreign companies can tap into these talent pipelines.
In summary, China's policy on new quality productive forces presents a range of opportunities for foreign founders across technology, manufacturing, green energy, and digital sectors. By understanding these priorities, foreign entrepreneurs can better position their companies for success in China.
Call to Action: Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.