Published by ChinaMNC · Sihong

China’s New Policy on Developing New Quality Productive Forces: A Guide for Foreign Founders

A practical summary of China’s latest policy direction on new quality productive forces, highlighting opportunities and compliance considerations for foreign founders registering or operating a company in China.

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

The Chinese government has issued a policy document on developing new quality productive forces (新质生产力), a concept that emphasizes innovation-driven, high-tech, and sustainable economic growth. For foreign founders planning to register a company in China or already operating there, the policy signals priority areas and regulatory trends that can shape business strategy. This article summarizes the key points from the official source, focusing on practical implications.

Core Policy Direction

The policy calls for taking scientific and technological innovation as the lead, with a core marker being a substantial increase in total factor productivity. It aims to drive revolutionary technological breakthroughs, innovative allocation of production factors, and deep industrial transformation and upgrading. The document stresses coordinating the relationship between government and market, quality and form, reform and development, and self-reliance and opening-up. It also emphasizes developing production relations that better match new quality productive forces.

For foreign founders, this means China is prioritizing sectors and activities that align with high technology, high efficiency, and high quality. Businesses that contribute to these goals may find a more supportive environment.

Strengthening Original and Disruptive Innovation

The policy outlines efforts to strengthen original and disruptive scientific and technological innovation. It calls for organizing major science and technology projects focused on strategic, landmark, and leading products. It supports both goal-oriented and free exploration in basic research, and aims to address weaknesses in technical and engineering sciences. The document also mentions coordinating the construction of science and technology platforms and major scientific infrastructure, with an emphasis on open sharing.

Foreign founders involved in R&D-intensive industries should note the emphasis on basic research and disruptive technologies. While the policy does not specify direct benefits for foreign firms, it indicates a broader ecosystem that values innovation.

Breakthroughs in Key Core Technologies

China plans to leverage its new system of mobilizing resources nationwide to achieve breakthroughs in key core technologies. This includes implementing actions for high-quality development of key manufacturing industry chains and industrial innovation projects, with full-chain research and all-factor support. The policy also mentions applying first-of-its-kind and first-batch application policies to promote technology iteration.

Foreign companies in manufacturing or high-tech sectors may see opportunities to participate in these supply chains, but they should be aware of the focus on domestic capabilities.

Role of Enterprises in Innovation

The policy strengthens the principal role of enterprises in scientific and technological innovation. It introduces measures such as a corporate R&D reserve fund system and encourages increased R&D investment by technology-based SMEs. The R&D expense super-deduction ratio is to be raised. Enterprise R&D projects that meet national strategic needs can be elevated to national projects, and capable private enterprises are encouraged to lead national major technology breakthrough tasks.

Foreign-invested enterprises may benefit from a more supportive environment for R&D, but they should verify eligibility for specific incentives. The policy also mentions supporting specialized and sophisticated SMEs.

Commercializing Scientific and Technological Achievements

To accelerate the transformation of achievements into real productive forces, the policy calls for leveraging the超大-scale market advantage and promoting efficient matching of technology and market. It includes actions for large-scale application demonstration of new technologies, products, and scenarios. It also plans to build platforms for proof-of-concept and pilot testing, and to increase the construction and opening of application scenarios. A full-process evaluation mechanism for science and technology projects is to be explored, integrating R&D and commercialization tasks at project initiation and assessing application performance at acceptance. Universities and research institutes are encouraged to license achievements to SMEs on a “use first, pay later” basis.

Foreign founders with innovative products may find more opportunities for pilot testing and market application, but they should navigate IP and licensing arrangements carefully.

Transforming Traditional Industries

The policy emphasizes upgrading traditional industries using digital, intelligent, and green technologies. It supports enterprises in transforming and upgrading traditional industries with digital and green technologies. Key industries such as mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction are to maintain and enhance their position and competitiveness in the global industrial division of labor. The policy also mentions industrial base reconstruction, major technical equipment breakthroughs, major technological transformation and upgrading of manufacturing, and large-scale equipment renewal projects. Financial support for technological transformation is to be strengthened, and tax incentives for technological transformation investment are to be implemented. The policy also covers agriculture and services.

Foreign companies in these sectors may see incentives for upgrading operations, but they should stay informed about specific local implementation measures.

Cultivating Emerging Industries and Future Industries

The policy aims to cultivate and strengthen emerging industries, including next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment, and aerospace. It encourages building distinctive and complementary strategic emerging industry clusters, while avoiding “involutionary” competition. It also supports the healthy and orderly development of the low-altitude economy and commercial aerospace under safety conditions.

For future industries, the policy mentions exploring multiple technology routes and application scenarios for quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and 6G. A mechanism for investment growth and risk sharing in future industries is to be established, guiding social capital to increase investment.

Foreign founders in these cutting-edge fields should monitor regulatory developments and consider early engagement with local authorities.

Deep Integration of the Real Economy and Digital Economy

The policy calls for improving data property rights, market transactions, benefit distribution, and interest protection systems. Pilot demonstration projects for data elements are to be implemented. It also mentions optimizing the layout and operation of national data infrastructure, deepening the digital transformation of manufacturing, and implementing projects such as “East Data West Computing,” intelligent manufacturing, and industrial internet innovation. A national integrated computing network and national blockchain network are to be built. The policy aims to create internationally competitive digital industry clusters.

Foreign companies in digital sectors may face both opportunities and data compliance requirements.

“AI+” Action

The policy proposes a comprehensive “AI+” action to promote the application of artificial intelligence in traditional industries. It specifically mentions accelerating the application of intelligent connected new energy vehicles, AI phones and computers, and humanoid robots. It calls for breakthroughs in basic theories and core technologies, and strengthening the efficient supply of computing power, algorithms, and data. National AI industry application pilot bases and high-value application scenarios are to be laid out according to local conditions and industry-specific policies. A system for technology monitoring, risk warning, and emergency response is to be built to ensure AI is safe, reliable, and controllable.

Foreign AI companies should note the emphasis on safety and controllability, and may need to align with local standards.

Green and Low-Carbon Development

The policy aims to build a green, low-carbon, and circular economic system. It supports green manufacturing, green services, and green energy industries. It calls for green transformation of key industries, promotion of green technology innovation, and application of advanced green technologies. It also mentions building zero-carbon factories and parks, improving resource management, and enhancing waste recycling. A carbon emission total and intensity dual-control system is to be fully implemented, along with a carbon emission statistics and accounting system, standards and measurement system, product carbon labeling certification system, and product carbon footprint management system. The national carbon market is to be improved, with expanded coverage and optimization of allowance allocation. The national unified green certificate market is to be improved. Financial institutions are encouraged to provide diverse green financial products.

Foreign companies should prepare for stricter carbon reporting and may find incentives for green practices.

Energy Revolution

The policy focuses on carbon peaking and carbon neutrality goals. It calls for orderly development of advanced nuclear fission energy, building a high-proportion renewable energy power system, improving policies for renewable energy consumption and regulation, and organizing major application scenario demonstrations. It aims to accelerate the green transformation of energy consumption and supply, and strengthen international cooperation.

Reforms to Promote Integration of Science, Technology, and Economy

The policy calls for deepening reforms to closely integrate science and technology with the economy. It includes deploying science and technology tasks in major national engineering projects, improving demand-oriented topic selection, management systems with consistent responsibilities and rights, and application-oriented evaluation systems. Reforms on empowering scientific and technological achievements with property rights and separate asset management are to be deepened. Qualified state-owned enterprises are allowed to carry out various forms of incentives. A national integrated data market that is open, shared, and secure is to be built, along with a technology market with efficient transformation.

Improving Market Regulation

The policy aims to improve market access systems, strengthen anti-monopoly and anti-unfair competition, and enhance governance in fields such as AI and biology. It calls for cross-departmental joint supervision, innovative regulatory methods, reduced on-site inspections, and exploration of “data-based decision-making and management” regulatory models. A comprehensive intellectual property management system is to be established, with punitive damages improved. Tax systems adapted to new business forms are to be studied.

Foreign founders should be aware of the evolving regulatory landscape, particularly in AI and biology.

Financial Innovation Products

The policy encourages and regulates angel investment, venture capital, and private equity investment. It calls for better leveraging government investment funds and improving support policies for long-term capital to invest early, in small enterprises, in the long term, and in hard technology. Banks are encouraged to develop loan products suited to new quality productive forces. The policy also mentions enriching science and technology innovation bond products, supporting qualified technology enterprises to list and finance, and optimizing merger and acquisition, equity incentive systems. Insurance products covering the entire chain of science and technology innovation are to be developed, and technology leasing businesses explored.

Allocating Advanced Production Factors Globally

The policy calls for expanding high-level opening-up and utilizing global markets. Free trade pilot zones are encouraged to cluster domestic and foreign advanced production factors based on their location, resources, and industrial advantages. It also mentions leveraging multilateral and bilateral cooperation mechanisms to promote joint science parks, “Belt and Road” joint laboratories, and international advanced technology application centers, and to build a global innovation cooperation network. Foreign venture capital institutions and international standards organizations are encouraged to develop in China. An efficient, convenient, and secure cross-border data flow mechanism is to be established.

This is particularly relevant for foreign founders: the policy explicitly welcomes foreign venture capital and international standards organizations, and promises to improve cross-border data flows.

Talent Development

The policy emphasizes cultivating talent urgently needed for new quality productive forces. It calls for integrated reform of education, science and technology, and talent systems. Higher education is to be improved and expanded, with new research-oriented universities developed. Modern vocational education is to be promoted with an integrated work-study skills training model. Enterprises and universities are encouraged to jointly customize talent training. High-skilled talents are supported to serve as part-time practical training instructors in vocational schools.

Foreign companies may find opportunities to collaborate with educational institutions for talent development.

Practical Takeaways for Foreign Founders

While this policy is a high-level strategic document, it signals clear priorities for China’s economic development. Foreign founders registering or operating a company in China should consider the following:

• Align with priority sectors: Sectors such as AI, new energy, advanced manufacturing, biomedicine, and green technologies are highlighted. Businesses in these areas may find more support and market opportunities.
• Leverage R&D incentives: The policy mentions increased R&D super-deduction and support for enterprise-led national projects. Foreign-invested enterprises should check eligibility with local authorities.
• Prepare for green compliance: Carbon reporting and green certification systems are being strengthened. Early adoption can reduce future compliance risks.
• Engage with opening-up measures: Free trade zones and cross-border data flow mechanisms are evolving. Foreign founders should monitor local implementation.
• Monitor regulatory changes: Market regulation, especially in AI and data, is tightening. Compliance should be a priority.

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 company registration and ongoing operations in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.