Published by ChinaMNC · Gaoling

China's New Quality Productive Forces Policy: What Foreign Founders Should Know

A practical guide for foreign founders on China's official policy direction for developing new quality productive forces, covering tech innovation, industrial upgrading, digital and green transition, talent, and foreign participation.

Why This Policy Matters for Foreign Founders

The Chinese government has issued a major policy document on developing "new quality productive forces" — a framework that ties technological innovation to industrial upgrading and high-quality development. For foreign founders registering or operating a company in China, the document signals where policy support, regulatory attention, and market opportunities are likely to concentrate. Below is a practical summary of the source document's key directions, written for founders who need to understand the policy landscape rather than the political language.

The policy is guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the Party's 20th National Congress and its plenary sessions. Its core marker is a substantial rise in total factor productivity, with scientific and technological innovation as the lead. It calls for coordinating the relationship between government and market, quality and business format, reform and development, and self-reliance and openness — while balancing development and security.

Innovation and Technology: Where Support Is Directed

Original and disruptive research

The document calls for major science and technology projects focused on strategic, landmark, and leading products, oriented toward the world科技 frontier, the main economic battlefield, national needs, and people's health. It emphasizes both goal-oriented and free-exploration research, stronger basic and applied basic research, coordinated construction of science infrastructure with open sharing, and programs for basic and interdisciplinary disciplines.

Key core technologies

China will use its new nationwide system to organize high-quality development actions for key manufacturing supply chains and industrial innovation projects in priority fields, with whole-chain and whole-ecosystem support. Policies for first-of-their-kind and first-batch applications are to be implemented to speed up technology iteration.

National strategic science and technology forces

National laboratories are to play a bigger role in organizing major projects and building innovation platforms, with pilot institutional reforms. The document calls for optimizing the positioning of national research institutes, high-level research universities, and leading tech enterprises, and for gradually establishing compensation systems for universities and research institutes that reward knowledge value and innovation. Research-type public institutions may adopt more flexible management systems. Leading tech enterprises are expected to help integrate innovation, industrial, capital, and talent chains.

Enterprises as the Main Body of Innovation

Several measures directly concern companies:

• R&D incentives: A corporate R&D reserve fund system is to be established, and the super-deduction ratio for enterprise R&D expenses is to be raised, including for small and medium-sized tech firms.
• National projects: Enterprise R&D projects that meet national strategic needs may be elevated to national projects through established procedures; capable private enterprises are encouraged to lead major national technology breakthroughs.
• User-based evaluation: Mechanisms are to be built for users to assess and evaluate results, strengthening enterprises' role in commercializing outcomes.
• SME support: Specialized, refined, distinctive, and innovative SMEs are explicitly supported.

Commercializing Research and Upgrading Industry

From lab to market

The policy leverages China's large-scale market to connect technology with demand, including large-scale demonstration of new technologies, products, and scenarios. Concept validation and pilot-testing platforms are to be built, and application scenarios opened up. Evaluation of science projects is to cover the whole process — R&D and commercialization tasks are deployed together at project approval and application results assessed at acceptance. Universities and research institutes may license results to small and micro enterprises on a "use first, pay later" basis. Large enterprises are encouraged to open their supply chains to smaller firms. Artificial intelligence is to lead changes in research paradigms.

Traditional industries

Upgrading traditional sectors remains central: national standards are to guide optimization, and enterprises are encouraged to use digital-intelligent and green technologies. The document lists mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction as sectors whose global position and competitiveness are to be consolidated. It also mentions industrial base rebuilding, major technical equipment, manufacturing technological upgrading, and large-scale equipment renewal programs, plus tax policies for upgrading investment. Agriculture actions cover grain capacity, seed industry, smart agriculture, agricultural machinery, and modern facility agriculture. Services are to be expanded and upgraded, with producer services moving toward specialization and higher value-chain positions.

Emerging and future industries

Strategic emerging industries include next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment, and aerospace. The policy calls for distinctive, complementary clusters, deeper intra-industry specialization, and avoiding "involution-style" competition. Low-altitude economy and commercial aerospace are to develop in an orderly way under safety conditions. Future industries include quantum technology, biomanufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence, and 6G, with investment growth and risk-sharing mechanisms.

Digital, Green, and Data Directions

The document promotes deep integration of the real economy and digital economy, including data property rights, data trading, and pilot programs for data factors. It calls for optimizing national data infrastructure, manufacturing digital transformation, the "East Data, West Computing" project, smart manufacturing, industrial internet, a national integrated computing network, and a national blockchain network.

A dedicated "AI+" action calls for AI application in traditional industries and next-generation intelligent terminals such as intelligent connected vehicles, AI phones and computers, and humanoid robots. It also calls for breakthroughs in basic theory and core technologies, efficient supply of computing power, algorithms, and data, and national AI application pilot bases and high-value scenarios, alongside monitoring, risk warning, and emergency response systems.

On green development, the policy aims to build a green, low-carbon, circular economy: green manufacturing, green services, and green energy; green upgrades of key industries; green consumption incentives and certification; zero-carbon factories and parks; and circular waste systems. Policy tools include fiscal, financial, investment, price, technology, and environmental policies, a carbon emissions dual-control system, carbon accounting and footprint management, expansion of the national carbon market, a voluntary emission reduction market, a unified green certificate market, green financial products, green government procurement, and green-oriented agricultural subsidies. An energy revolution section covers orderly advanced nuclear fission, high-share renewable power systems, and new energy consumption and regulation measures.

Regulation, Finance, and Opening Up

Reforms aim to link science and the economy: demand-oriented topic selection, responsibility-aligned management, and application-oriented evaluation; reform of job-related scientific results rights and separate asset management; and diversified incentives for eligible state-owned enterprises. A unified, open, shared, and secure national data market and a technology market are to be built.

Market supervision is to be improved with market access rules, antitrust and anti-unfair competition enforcement, governance in AI and biology, cross-department joint supervision, data-based supervision, stronger intellectual property management, punitive damages, and tax rules suited to new business forms.

On finance, the document encourages angel, venture, and private equity investment, government investment fund guidance, long-term capital for early-stage, small, long-horizon, and hard-tech projects, patient capital, bank loan products suited to new quality productive forces, science and technology bonds, listing financing for quality tech firms, and insurance products covering the innovation chain.

On global integration, the policy calls for high-level opening: free trade zones clustering advanced production factors, science parks, Belt and Road joint laboratories, international advanced technology application centers, global innovation networks, international big science programs, and encouragement for foreign venture capital institutions and international standards organizations to operate in China. An efficient, convenient, and secure cross-border data flow mechanism is to be established.

Talent

Education, science, and talent systems are to be reformed together: expanding quality higher education, developing new research universities, adjusting disciplines based on industry and technology trends, high-quality vocational education, work-study integrated skills training, and joint customized talent programs between enterprises and universities.

What This Means in Practice

Foreign founders should note the policy emphasis on enterprise-led R&D, easier licensing of university research, digital and AI applications, green manufacturing, and opening measures such as foreign VC participation and cross-border data mechanisms. These are policy directions, not automatic entitlements; implementation varies by region and sector. Founders should confirm details with local authorities and professional advisers.

Next step: Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.

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