Published by ChinaMNC · Chongyi

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

A plain-English briefing for foreign entrepreneurs on how China's official policy on new quality productive forces may shape company registration, R&D, financing, market access and operations in China.

What the Policy Is About

China's central authorities have issued a policy opinion on developing "new quality productive forces" — a term covering innovation-led growth. For foreign founders building a business in China, the document is worth reading less as a slogan and more as a map of where regulators intend to direct money, approvals, talent and infrastructure. It sets out priorities across science and technology, industrial upgrading, the digital economy, green transition, regulation and international cooperation.

The stated core is a sharp rise in total factor productivity, driven by technological breakthroughs, better allocation of production factors, and deep industrial upgrading. The policy calls for a production relations framework better suited to innovation, and for a development ecosystem that supports deep integration of technological and industrial innovation. It also stresses coordination between government and market, reform and development, and self-reliance and openness — a balance that matters to foreign-invested companies.

What This Means for Registration and Setup

Choosing where to sit

The policy encourages free trade pilot zones to cluster advanced domestic and foreign production factors according to their location, resources and industrial strengths. It also promotes jointly built science parks, Belt and Road joint laboratories and international advanced technology application centres. For founders comparing locations, these are the zones and platforms where policy support is being concentrated.

Data operations

A commitment to build an efficient, convenient and secure cross-border data flow mechanism appears in the text. Data infrastructure — national computing networks and a national blockchain network — is also being built out. Foreign founders handling data across borders should track how these mechanisms are implemented locally, as the policy sets direction rather than detailed procedure.

Innovation and R&D Incentives

• Enterprise R&D reserve system: companies are encouraged to set up R&D reserves, with a stated aim of strengthening firms' leading role in science and technology investment.
• Higher super-deduction: the policy calls for raising the R&D expense super-deduction ratio for enterprises.
• National project route: qualifying enterprise R&D projects consistent with national strategic needs may be elevated to national projects through established procedures, and capable private companies are encouraged to lead major national technology programmes.
• User-based evaluation: a mechanism is to be built under which users assess and evaluate outcomes, strengthening companies' role in commercialising results.
• SME support: specialised, refined, distinctive and innovative small and medium enterprises are singled out for support.

Technology Transfer and Commercialisation

Universities and research institutes are to be guided to license scientific and technological results to smaller companies on a "use first, pay later" basis. Large enterprises are encouraged to open their supply chains to SMEs. Concept-validation and pilot-testing platforms are to be established, with more application scenarios opened up. A full-process evaluation mechanism for science projects would link R&D and commercialisation at the approval stage and assess application results at acceptance, addressing the gap between technology development and uptake.

Sector Opportunities

The policy names several areas for growth. Founders should note that inclusion signals policy attention, not a market guarantee.

• Strategic emerging industries: next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment and aerospace. Clusters are to be built according to local conditions, with cross-regional industrial cooperation and eastern regions supporting central, western and northeastern regions.
• Future industries: quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence and 6G. A funding growth and risk-sharing mechanism is envisaged, with social capital encouraged to invest.
• Traditional industries: mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding and construction are to be upgraded using digital, intelligent and green technologies, backed by equipment renewal and tax policies for technical transformation.
• Services and agriculture: producer services are to move up the value chain; agricultural technology, smart agriculture, farm machinery and new forms such as agricultural factories are promoted.

Digital and AI Rules

An "AI+" action is to be fully implemented, including application of intelligent connected vehicles, AI phones and computers, and humanoid robots. National AI industry application pilot bases and high-value scenarios are to be laid out by sector and locality. The policy also calls for a technical monitoring, risk-warning and emergency-response system to keep AI safe, reliable and controllable. Governance of AI and biology is to be strengthened, alongside antimonopoly and fair-competition enforcement. A regulatory model of "deciding and managing with data" and fewer on-site inspections is proposed.

Green Transition

Green manufacturing, green services and green energy are priorities. The policy calls for zero-carbon factories and parks, green product certification and labelling, a national carbon market with expanded coverage, a voluntary greenhouse gas reduction market, a unified green certificate market, and carbon footprint management. Financial institutions are to offer diversified green finance products. Foreign founders in energy-intensive sectors should expect carbon accounting and certification requirements to become more structured.

Financing and Capital

The policy encourages angel investment, venture capital and private equity, and calls for better use of government investment funds as guides. Support policies for long-term capital investing early, small, long-term and in hard technology are to be improved, with "patient capital" expanded. Banks are encouraged to design loan products suited to new quality productive forces. The bond market for technology innovation is to be broadened, quality tech companies supported in listing, and insurance products covering the full innovation chain developed.

Foreign Participation and Talent

High-level opening-up is reaffirmed, with global markets to be developed and used. Foreign venture capital institutions and international standards organisations are explicitly encouraged to develop in China. On talent, the policy calls for reform of education, science and technology and talent systems, optimised university disciplines, high-quality vocational education, and customised training jointly run by companies and universities.

Practical Takeaways

For foreign founders, the document is a signal of direction: R&D incentives, commercialisation channels, sector priorities, green compliance, financing tools and openness commitments. Because it is a policy opinion rather than implementing rules, specific requirements — registration procedures, tax treatment, data transfer approvals, subsidy eligibility — will be set by subsequent regulations and local measures. Founders should verify details with local authorities and professional advisers before committing to structure or location.

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