Published by ChinaMNC · Sucheng
China’s New Push for ‘New Quality Productive Forces’: What Foreign Founders Need to Know
A practical guide for foreign founders on China’s official policy direction for innovation-driven growth, covering R&D incentives, market access, green transition, and international collaboration.
China’s New Push for ‘New Quality Productive Forces’: What Foreign Founders Need to Know
China’s central government has issued a broad policy framework on developing “new quality productive forces” — a term that signals a stronger focus on innovation-led, high-quality growth. For foreign founders registering or operating a company in China, the document outlines priorities that can shape incentives, market opportunities, and regulatory expectations. Below is a practical summary of the key points most relevant to foreign-invested enterprises.
Innovation and R&D: Where Support Is Directed
The policy emphasizes original and disruptive technological innovation, aiming to address weaknesses in technical and engineering sciences through organized basic research and free exploration. It calls for better coordination of science and technology platforms and major infrastructure, with an emphasis on open sharing and avoiding duplication.
For businesses, the framework strengthens the role of enterprises in innovation. Specific measures include:
- R&D reserve fund system: Companies are encouraged to establish R&D reserve funds, reinforcing their leading role in science and technology investment.
- Higher R&D tax deduction: The policy calls for increasing the additional tax deduction ratio for enterprise R&D expenses, which can reduce the effective cost of innovation.
- National project participation: Enterprise R&D projects that align with national strategic needs may be elevated to national projects through established procedures. Capable private enterprises are encouraged to lead major national technical breakthroughs.
- Support for specialized SMEs: The policy backs the development of “specialized, refined, distinctive, and innovative” small and medium-sized enterprises.
Foreign founders with R&D activities in China should note these incentives and consider how their projects align with national priorities.
Commercializing Technology: From Lab to Market
The document stresses converting scientific results into real productivity. It proposes:
- Large-scale application demonstrations for new technologies, products, and scenarios.
- Development of proof-of-concept and pilot-testing platforms, with more application scenarios opened up.
- A whole-process evaluation mechanism for science projects, integrating R&D and commercialization tasks at project approval and assessing application results at acceptance.
- Guidance for universities and research institutes to license results to SMEs on a “use first, pay later” basis.
- Encouragement for large enterprises to open their supply chains to SMEs.
- Use of artificial intelligence to transform research paradigms and improve efficiency.
These measures can lower barriers for startups and smaller firms seeking to adopt or commercialize new technology.
Industrial Priorities: Traditional, Emerging, and Future Industries
The policy balances upgrading traditional industries with cultivating new ones. For traditional sectors — mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction — it promotes digital, intelligent, and green upgrades, supported by funding and tax incentives for technological transformation.
In emerging industries, the focus is on next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment, and aerospace. The policy encourages building distinctive industrial clusters and avoiding “involution-style” competition.
For future industries, it lists quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications. A risk-sharing mechanism and increased investment are planned.
Foreign founders in these fields may find alignment with local cluster development and support policies.
Digital and AI Integration
The framework calls for deeper integration of the real economy and digital economy. It includes:
- Improving data property rights, market trading, benefit distribution, and protection systems.
- Pilot programs for data elements.
- National data infrastructure and a unified computing network.
- A “Data East, Computing West” initiative and industrial internet development.
- A comprehensive “AI+” action to apply AI across traditional industries, including intelligent connected vehicles, AI phones and computers, and humanoid robots.
- Building national AI application pilot bases and high-value scenarios.
- Establishing technology monitoring, risk warning, and emergency response systems to ensure AI is safe, reliable, and controllable.
Foreign companies in tech and manufacturing should consider how AI adoption and data compliance will affect their operations.
Green Transition and Energy
The policy sets out a green, low-carbon, circular economic system. Key points include:
- Strengthening green manufacturing and services, and expanding the green energy industry.
- Green upgrades for key industries and promotion of advanced green technologies.
- Green consumption incentives, certification, and labeling.
- Zero-carbon factories and parks.
- Tax, financial, investment, price, and environmental policies for green development.
- A carbon emissions dual-control system, carbon accounting, footprint management, and a national carbon market with expanded coverage.
- Green financial products from financial institutions.
- An energy revolution toward carbon peak and neutrality, with orderly development of advanced nuclear fission and a high-share renewable power system.
Foreign founders should note compliance obligations and opportunities in green finance and low-carbon products.
Market Regulation, Finance, and Talent
The document addresses the business environment. It calls for:
- Improving market access and strengthening anti-monopoly and anti-unfair competition enforcement.
- Governance in AI and biology.
- More cross-departmental joint supervision, less on-site inspection, and data-driven regulation.
- A comprehensive intellectual property management system with punitive damages.
- Research on tax systems suited to new business forms.
On finance, it encourages angel investment, venture capital, and private equity, with policies supporting long-term capital for early-stage, small, long-term, and hard-tech projects. It also promotes bank loan products for new quality productive forces, science and technology bonds, listings for qualified tech firms, insurance products covering the innovation chain, and science leasing.
For talent, the policy promotes reform of education, science, and talent systems, including new research universities, vocational education, and customized training jointly run by enterprises and universities.
International Collaboration and Foreign Investment
The framework explicitly encourages global allocation of advanced production factors. It supports:
- Pilot free trade zones to cluster domestic and foreign advanced factors based on location and industrial strengths.
- Joint science parks, “Belt and Road” joint laboratories, and international advanced technology application centers.
- Participation in international big science programs and projects.
- Foreign venture capital institutions and international standards organizations to develop in China.
- An efficient, convenient, and secure cross-border data flow mechanism.
These points are directly relevant to foreign founders considering China-based R&D, venture activities, or data operations.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.