Published by ChinaMNC · Chongyi

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

China's latest policy on developing new quality productive forces outlines priorities in technology, industry, and green transition. Foreign founders can use this guide to understand the direction of China's innovation ecosystem and practical steps for registering and operating a company in China.

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

China's central government has issued a major policy opinion on developing "new quality productive forces"—a strategic framework that prioritizes technological innovation, industrial upgrading, and green transition. For foreign founders considering registering a company in China or expanding operations, this policy signals where government support and market opportunities are likely to concentrate. Below is a practical summary of the key points, based solely on the official source.

Core Direction: Innovation-Driven Development

The policy emphasizes taking scientific and technological innovation as the lead, with a core marker being a substantial increase in total factor productivity. It calls for advancing technological breakthroughs, innovative allocation of production factors, and deep industrial transformation and upgrading. The goal is to better align production relations with the development of new quality productive forces and create a favorable ecosystem for deep integration of technological and industrial innovation.

Strengthening Original and Disruptive Technological Innovation

The policy focuses on strategic, landmark, and leading products, organizing major science and technology projects. It supports both goal-oriented and free-exploration basic research, with organized basic research and applied basic research to address weaknesses in technical and engineering sciences. It also calls for coordinated construction of science and technology platforms and major scientific infrastructure, with emphasis on open sharing and avoiding duplication. Specific actions include implementing breakthrough plans for basic disciplines and interdisciplinary fields, and strengthening original theoretical research and key generic technologies, frontier leading technologies, modern engineering technologies, and disruptive technologies.

Breaking Through Key Core Technologies

Leveraging the new system of mobilizing national resources, the policy aims to organize high-quality development actions for key manufacturing industry chains and industrial innovation projects in key areas. It emphasizes full-chain tackling, all-factor support, and full-ecosystem construction. It also calls for implementing application policies for first-of-its-kind and first-batch products to promote technology iteration and upgrading.

Coordinating National Strategic Scientific and Technological Forces

The policy outlines roles for national laboratories in organizing major national science and technology projects and building major innovation platforms, with pilot reforms in institutional mechanisms. It calls for optimizing the positioning and layout of national research institutions, high-level research universities, and leading technology enterprises. It also mentions gradually establishing compensation systems for universities and research institutes that stimulate innovation vitality, are knowledge-value oriented, and balance regulation with incentives. Reforms of national research institutions and high-level research universities will be advanced simultaneously. Research-type public institutions will be allowed to adopt more flexible management systems. Leading technology enterprises are expected to play a key role in deeply integrating innovation, industrial, capital, and talent chains.

Enhancing Enterprises' Role as Innovation Entities

The policy calls for increasing inclusive incentive policies, establishing a corporate R&D reserve fund system, and strengthening enterprises' leading role in science and technology investment. It encourages small and medium-sized technology enterprises to increase R&D investment and raises the proportion of R&D expense super-deduction. Enterprise R&D projects that meet national strategic needs can be elevated to national projects through procedures, and capable private enterprises are encouraged to lead national major technological breakthrough tasks. A mechanism for user assessment and evaluation of results will be established, strengthening enterprises' role in commercialization. It also calls for improving institutional arrangements for original innovation in state-owned enterprises and supporting the development of specialized, refined, characteristic, and innovative small and medium-sized enterprises.

Accelerating Commercialization of Scientific and Technological Achievements

The policy leverages China's super-large market advantage to match technology with the market and promote scaled development of new quality productive forces. It calls for implementing large-scale application demonstration actions for new technologies, new products, and new scenarios. It plans to build proof-of-concept and pilot testing platforms and increase the construction and opening of application scenarios. It explores a whole-process evaluation mechanism for science and technology projects, integrating R&D and commercialization tasks at project approval and assessing application performance at acceptance. Universities and research institutes are guided to license scientific and technological achievements to small and medium-sized enterprises on a "use first, pay later" basis. Large enterprises are encouraged to open their supply chains to small and medium-sized enterprises, supporting the latter to become an important force in industrialization of achievements. Artificial intelligence is expected to lead changes in research paradigms and help improve research efficiency.

Transforming and Upgrading Traditional Industries

The policy emphasizes consolidating the foundation of the real economy and strengthening China's manufacturing capabilities. It calls for using national standards to guide optimization and upgrading of traditional industries, supporting enterprises in using digital-intelligent and green technologies to transform traditional industries. It organizes actions to improve quality and upgrade key industries, consolidating and enhancing the position and competitiveness of mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction in the global industrial division of labor. It also mentions industrial base reconstruction projects, major technical equipment breakthrough projects, major manufacturing technological transformation and upgrading projects, and large-scale equipment renewal projects. Financial support for technological transformation of manufacturing enterprises will be strengthened, and tax incentives related to technological transformation investment will be implemented. The policy promotes digital-intelligent transformation of manufacturing, developing smart manufacturing, green manufacturing, and service-oriented manufacturing. It also calls for enhancing quality and technical infrastructure and strengthening brand building. In agriculture, it outlines actions for a new round of grain production capacity improvement, seed industry revitalization, smart agriculture, high-quality development of agricultural machinery and equipment, modernization of facility agriculture, and construction of agricultural science and technology innovation conditions, developing new forms such as agricultural factories. In services, it calls for actions to expand and improve the service industry, promoting producer services toward specialization and higher value chains, and promoting consumer services toward high quality, diversity, and convenience.

Cultivating Emerging Industries

The policy aims to build emerging pillar industries. It calls for accelerating the development of strategic emerging industries such as next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robots, biomedicine, high-end equipment, and aerospace. It encourages building strategic emerging industry clusters with local characteristics and complementary advantages, promoting resource concentration, subject concentration, achievement integration, and division of labor. It calls for deepening professional division of labor within industries and products, promoting cross-industry and cross-regional integration, and avoiding "involution-style" competition. It supports establishing cross-regional industrial collaboration mechanisms led by industrial chains and with enterprises as main bodies, supporting eastern regions to drive central, western, and northeastern regions in developing emerging industries according to local conditions. It also mentions promoting the healthy and orderly development of the low-altitude economy and commercial aerospace under the premise of ensuring safety.

Forward-Looking Layout of Future Industries

The policy explores diverse technological routes, typical application scenarios, feasible business models, and market supervision rules to promote the development of future industries such as quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications, accelerating the formation of a relatively complete industrial ecosystem. It calls for establishing investment growth and risk-sharing mechanisms for future industries, making full use of existing fiscal policies to support their development, and guiding social capital to continuously increase investment.

Deep Integration of the Real Economy and Digital Economy

The policy calls for improving systems for data property rights confirmation, market transactions, rights distribution, and interest protection. It implements pilot demonstration projects related to data factors to fully unleash the potential of data. It optimizes the layout, construction, and operation of national data infrastructure, deeply carries out manufacturing digital transformation actions, and implements projects such as "East Data West Computing," smart manufacturing, and industrial internet innovative development. It aims to build a national integrated computing network and a national blockchain network. It also calls for improving policy systems that promote digital industrialization and industrial digitalization, and building internationally competitive digital industry clusters.

Comprehensive Implementation of the "AI+" Action

The policy promotes AI transformation of traditional industries and accelerates scenario applications of new-generation intelligent terminals such as intelligent connected new energy vehicles, AI phones and computers, and humanoid robots. It calls for accelerating AI and other digital-intelligent technology innovation, breaking through basic theories and core technologies, and strengthening efficient supply of computing power, algorithms, and data. It calls for layout of national AI industry application pilot bases and high-value application scenarios according to local conditions and by industry, and vigorously promoting AI application in various industries. It also calls for building technology monitoring, risk warning, and emergency response systems to ensure AI is safe, reliable, and controllable.

Building a Green, Low-Carbon, and Circular Economic System

The policy aims to strengthen green manufacturing, develop green services, and expand the green energy industry. It combines source reduction, process control, and efficient end-of-pipe treatment, coordinating green transformation of key industries, accelerating green technology innovation and application of advanced green technologies. It calls for improving green consumption incentive mechanisms, strengthening green product certification and labeling systems, raising green consumption levels, and using green consumption to drive green product supply. It plans to build a number of zero-carbon factories and parks. It also calls for improving total resource management and comprehensive conservation systems, and improving waste recycling systems.

Optimizing the Green Development Policy Toolbox

The policy implements fiscal, financial, investment, price, science and technology, and environmental policies that promote green and low-carbon development. It calls for improving mechanisms for realizing the value of ecological products, fully implementing the dual control system for total carbon emissions and intensity, and improving carbon emission statistics and accounting systems, standards and measurement systems, product carbon labeling certification systems, and product carbon footprint management systems. It aims to improve carbon pricing mechanisms with the national carbon market as the main body, expand coverage of the national carbon emissions trading market, optimize carbon allowance allocation plans, accelerate construction of the greenhouse gas voluntary emission reduction trading market, and improve the national unified green certificate market. It encourages financial institutions to provide diversified green financial products. It calls for optimizing government green procurement policies and improving the green tax system. It also implements a green ecology-oriented agricultural subsidy system.

Actively Advancing the Energy Revolution

Focusing on carbon peak and carbon neutrality goals, the policy 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, organizing demonstration and promotion of major application scenarios, accelerating the greenization of energy consumption in production and life, and promoting revolutions in energy consumption, supply, technology, and systems, while strengthening international cooperation across the board.

Deepening Reform for Closer Integration of Science, Technology, and the Economy

The policy calls for deploying science and technology tasks as needed in major national engineering projects, improving demand-oriented topic selection systems, management systems with consistent responsibilities and rights, and application-oriented evaluation systems. It deepens reforms of empowering scientific and technological achievements and separate asset management. Qualified state-owned enterprises are allowed to carry out various forms of incentives. It calls for building an open, shared, and secure national integrated data market, improving a technology market with efficient transformation, and promoting efficient aggregation and smooth flow of various advanced and high-quality production factors.

Improving Market Supervision Systems

The policy calls for improving market access systems, strengthening anti-monopoly and anti-unfair competition. It strengthens governance in fields such as AI and biology. It calls for strengthening cross-departmental joint supervision, innovating supervision methods, reducing on-site supervision frequency, exploring "data-based decision-making and data-based management" supervision models, and improving the intelligence level of cross-departmental comprehensive supervision. It calls for establishing an efficient comprehensive intellectual property management system and improving punitive damages systems. It also calls for studying tax systems suitable for new business forms.

Increasing Supply of Innovative Financial Products

The policy encourages and regulates the development of angel investment, venture capital, and private equity investment, better leveraging the guiding role of 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, strengthening patient capital. It encourages banks to develop loan products suited to the characteristics of new quality productive forces. It enriches the science and technology innovation bond product system, supports qualified technology enterprises in listing and financing, and optimizes systems for mergers and acquisitions, equity incentives, etc., for technology enterprises. It calls for developing insurance products covering the entire chain of science and technology innovation and exploring businesses such as technology leasing.

Allocating Advanced Production Factors Globally

The policy calls for expanding high-level opening up and exploring global markets. It encourages free trade pilot zones to combine location characteristics, resource endowments, and industrial advantages to gather advanced production factors from home and abroad. It calls for leveraging various multilateral and bilateral cooperation mechanisms to promote platforms such as jointly built science and technology parks, "Belt and Road" joint laboratories, and international advanced technology application promotion centers, and to proactively build a global innovation cooperation network. It calls for leading and actively participating in international big science programs and big science projects. It encourages foreign venture capital institutions, international standards organizations, etc., to develop in China. It calls for establishing efficient, convenient, and secure cross-border data flow mechanisms.

Training Talent Urgently Needed for New Quality Productive Forces

The policy calls for coordinating integrated reform of education, science and technology, and talent systems and mechanisms. It promotes quality improvement and capacity expansion of higher education, develops new research-oriented universities, and optimizes mechanisms for adjusting disciplines and majors in higher education according to industrial and technological trends. It promotes high-quality development of modern vocational education and comprehensively advances the integrated work-study skills talent training model. It adheres to cultivating talent in practice. It encourages enterprises and higher education institutions to jointly customize talent training and supports master craftsmen and highly skilled talent to serve as part-time internship trainers in vocational schools.

Practical Takeaways for Foreign Founders

For foreign founders registering a company in China, this policy indicates several practical directions. First, innovation-intensive sectors—such as AI, new energy, biomedicine, high-end equipment, and green technologies—are likely to receive policy support and market attention. Second, the emphasis on enterprises' innovation role and commercialization suggests opportunities for foreign-invested enterprises to participate in national science and technology projects and to license technologies. Third, the policy's focus on data infrastructure and cross-border data flows may affect how foreign companies manage data operations in China. Finally, the green transition and energy revolution present long-term opportunities for companies with relevant technologies and expertise.

Next Steps

Foreign founders should monitor implementing regulations and local pilot policies that may follow this national guidance. When registering a company in China, it is advisable to align business scope and investment plans with encouraged sectors. For assistance with company registration and ongoing operations in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.

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