Published by ChinaMNC · Baiyin

China's New Quality Productive Forces: What Foreign Founders Need to Know

A practical guide for foreign founders on China's policy to develop new quality productive forces, highlighting key sectors, incentives, and considerations for registering and operating a company in China.

China's Push for New Quality Productive Forces

China's central government has issued a major policy document on developing new quality productive forces—a strategic initiative to drive innovation-led, high-quality growth. For foreign founders registering or operating a company in China, this policy signals priority sectors, incentives, and regulatory trends that could shape your business environment. Below is a summary of the key points from the official document, framed as practical guidance.

1. Strengthening Original and Disruptive Innovation

The policy emphasizes breakthroughs in science and technology, focusing on strategic and leading-edge products. It supports both goal-oriented and free-exploration research, with organized basic research to address weaknesses in technical and engineering sciences. Foreign founders in deep tech can expect more opportunities for collaboration with Chinese research institutions and access to major science infrastructure, which will be open for shared use.

2. Breaking Through Key Core Technologies

Using a new national system, China will organize major projects in manufacturing supply chains and industrial innovation. Policies like first-batch application support for new products will promote technology iteration. For foreign founders in advanced manufacturing, this could mean incentives to adopt and co-develop critical technologies.

3. Building National Strategic Science and Technology Forces

National laboratories, research institutes, universities, and leading tech enterprises will be optimized. Salary systems for universities and research institutes will be reformed to incentivize innovation, and research-type public institutions will have more flexible management. Foreign founders partnering with these entities may find more agile frameworks.

4. Enhancing Enterprises' Role in Innovation

The policy strengthens enterprises' position as innovation subjects, with measures like R&D reserve funds, higher R&D expense deductions, and support for private enterprises to lead national tech tasks. Specialized SMEs are encouraged. Foreign-invested enterprises may benefit from a more supportive environment for R&D and innovation.

5. Accelerating Commercialization of Scientific Results

China will leverage its large market to scale new technologies, with demonstration actions for new products and scenarios. Concept validation and pilot testing platforms will be built. Universities and research institutes can license results to SMEs on a pay-after-use basis. Large enterprises will open supply chains to SMEs. AI will be used to transform research paradigms.

6. Upgrading Traditional Industries

Traditional sectors like mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction will be upgraded using digital, intelligent, and green technologies. Policies support equipment renewal and technological transformation. Foreign founders in these industries can find opportunities in modernization and green transition.

7. Cultivating Emerging Industries

Strategic emerging industries such as next-generation IT, new energy, new materials, intelligent connected vehicles, robotics, biomedicine, high-end equipment, and aerospace will be developed. Clusters with distinct advantages will be built, avoiding “involutionary” competition. Low-altitude economy and commercial space are to develop safely. Foreign founders in these fields can tap into cluster policies and cross-regional collaboration mechanisms.

8. Preemptive Layout of Future Industries

Future industries like quantum technology, biomanufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence, and 6G will be explored. Risk-sharing mechanisms and social capital guidance will support these areas. Foreign founders with cutting-edge technologies may find funding and partnership opportunities.

9. Deep Integration of Real and Digital Economies

Data property rights, trading, and protection systems will be improved. Digital transformation of manufacturing will be deepened, with projects like “East Data West Computing” and industrial internet. A national computing network and blockchain network will be built. Foreign founders in digital sectors can benefit from these infrastructure developments.

10. Full Implementation of “AI+” Initiative

AI will transform traditional industries, with applications in intelligent connected vehicles, AI phones/computers, and humanoid robots. AI innovation will be accelerated, with supply of computing power, algorithms, and data. National AI application pilot bases will be established. Safety, reliability, and controllability of AI will be ensured. Foreign founders in AI can engage with these initiatives.

11. Building a Green, Low-Carbon Circular Economy

Green manufacturing, services, and energy industries will be strengthened. Green upgrades in key industries, green technology innovation, and promotion will be advanced. Green consumption incentives, certification, and labeling will be improved. Zero-carbon factories and parks will be built. Foreign founders in green tech can leverage these policies.

12. Optimizing Green Development Policy Tools

Fiscal, financial, investment, price, and environmental policies will support green development. Carbon emission双控 (dual control) system, carbon markets, and green finance products will be improved. Government green procurement and tax systems will be optimized. Foreign founders in green sectors can access green finance and incentives.

13. Advancing Energy Revolution

Focusing on carbon peak and neutrality, advanced nuclear fission, high-proportion renewable energy systems, and new energy consumption will be developed. International cooperation in energy will be strengthened. Foreign founders in energy can find partnership opportunities.

14. Deepening Reform for Science-Economy Integration

Science tasks will be deployed in major projects. Reforms will empower researchers and state-owned enterprises with incentives. A national integrated data market and technology market will be built. Foreign founders can benefit from improved factor markets.

15. Improving Market Regulation

Market access, anti-monopoly, and anti-unfair competition will be strengthened. Governance in AI and biology will be enhanced. Cross-departmental supervision will be innovated, with data-driven regulation. Intellectual property protection will be improved. Tax systems for new business forms will be studied. Foreign founders should be aware of these regulatory trends.

16. Increasing Financial Innovation Products

Angel investment, venture capital, and private equity will be encouraged. Government funds will guide long-term capital towards early-stage, small, and hard-tech projects. Banks will develop loan products for new quality productive forces. Tech bonds, IPOs for tech firms, and insurance products will be supported. Foreign founders can explore these financing avenues.

17. Allocating Advanced Production Factors Globally

High-level opening-up will be expanded. Pilot free trade zones will agglomerate advanced factors. Platforms like joint science parks, Belt and Road joint labs, and international tech application centers will be promoted. Foreign venture capital institutions and international standards organizations are encouraged to develop in China. Cross-border data flow will be facilitated. Foreign founders can leverage these open platforms.

18. Cultivating Talent for New Quality Productive Forces

Education, science, and talent systems will be reformed. Higher education will be expanded, with new research universities and optimized disciplines. Vocational education will be improved. Enterprises and universities will jointly train talent. Foreign founders can access talent pipelines and collaboration in training.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

For assistance with registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.