Published by ChinaMNC · Zhoucun

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

A practical guide for foreign founders on China’s policy to develop new productive forces, covering R&D incentives, market access, green rules, and talent policies.

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

The Chinese government has issued a major policy document on developing “new productive forces.” For foreign founders registering or operating a company in China, this policy signals where incentives, regulatory changes, and market opportunities are likely to emerge. Below is a practical summary of the key measures, based only on the official text.

1. Innovation and R&D Support

The policy prioritizes original and disruptive technological innovation. It calls for major science projects focused on strategic, landmark, and leading products. Foreign founders with R&D operations should note:

• Basic research: The government will support organized basic research and free exploration, and implement plans for breakthroughs in basic and interdisciplinary disciplines.
• Key technologies: A “new type of nationwide system” will be used to organize breakthroughs in core technologies, with full-chain support and application policies for first-of-their-kind products.
• Corporate R&D: The policy establishes a corporate R&D reserve fund system, encourages small and medium-sized tech firms to increase R&D spending, and raises the super-deduction ratio for enterprise R&D expenses. Eligible private enterprises are encouraged to lead national major technology tasks.
• Commercialization: Measures include pilot platforms for concept validation and intermediate testing, and a mechanism to evaluate projects based on application results. Universities and research institutes are encouraged to license科技成果 to SMEs on a “use first, pay later” basis.

2. Industrial Upgrading and Emerging Sectors

The policy aims to transform traditional industries and grow new ones. Foreign founders should watch these areas:

• Traditional industries: Support for using digital, intelligent, and green technologies to upgrade mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction. Programs include industrial base再造, major equipment upgrades, and large-scale equipment renewal.
• Emerging industries: Accelerated development of next-generation information technology, new energy, new materials, intelligent connected vehicles, robotics, biomedicine, high-end equipment, and aerospace. The policy encourages cluster development and cross-regional cooperation, while avoiding “involutionary” competition.
• Future industries: Exploration of quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G. A funding growth and risk-sharing mechanism will be established.

3. Digital and AI Integration

The policy promotes deep integration of the real economy and digital economy. Key points:

• Data governance: Improve data property rights, market trading, benefit distribution, and protection systems. Pilot projects for data elements will be implemented.
• Digital infrastructure: Optimize national data infrastructure, advance “East Data West Computing,” smart manufacturing, and industrial internet initiatives. Build a national integrated computing network and blockchain network.
• AI+ action: Implement AI applications across industries, including intelligent connected vehicles, AI phones and computers, and humanoid robots. Support AI innovation, computing power, algorithms, and data supply. Establish monitoring, risk warning, and emergency response systems for AI safety.

4. Green Development and Energy

Green transition is a core pillar. Foreign founders in energy, manufacturing, or green tech should note:

• Green economy: Strengthen green manufacturing and services, expand green energy industries, and promote green technology innovation. Build zero-carbon factories and parks.
• Policy tools: Use fiscal, financial, investment, price, technology, and environmental policies to support green development. Improve carbon pricing, expand the national carbon market, and develop green finance products.
• Energy revolution: Orderly develop advanced nuclear fission, build a high-share renewable power system, and improve renewable energy consumption policies.

5. Market Reform and Business Environment

The policy includes measures to improve the business environment for innovative firms:

• Market supervision: Improve market access, strengthen anti-monopoly and anti-unfair competition enforcement, and enhance cross-departmental supervision. Explore data-driven supervision to reduce on-site inspections.
• Intellectual property: Establish an efficient IP management system and improve punitive damages.
• Finance: Encourage angel investment, venture capital, and private equity; support long-term capital for early-stage, small, long-term, and hard-tech projects. Encourage banks to develop loan products for new productive forces, enrich science and technology bond products, and support qualified tech firms to list and finance.
• Data market: Build an open, shared, and secure national integrated data market.

6. Opening Up and Global Talent

Foreign founders will find several provisions on international cooperation:

• Global production factors: Encourage free trade zones to cluster advanced production factors. Support joint science parks, “Belt and Road” joint laboratories, and international technology application centers. Encourage foreign venture capital institutions and international standards organizations to develop in China.
• Data cross-border flow: Establish an efficient, convenient, and secure mechanism for cross-border data flow.
• Talent: Reform education, science, and talent systems. Encourage enterprises and universities to jointly cultivate talent, support highly skilled workers to teach in vocational schools, and optimize university discipline settings based on industry trends.

Practical Takeaways for Foreign Founders

This policy indicates strong government support for technology-driven, green, and digital industries. Foreign founders should consider:

• Aligning R&D activities with encouraged sectors to benefit from tax incentives and R&D support.
• Exploring opportunities in emerging and future industries, where clusters and funding mechanisms are being developed.
• Preparing for stricter data and AI governance, while leveraging digital infrastructure.
• Incorporating green practices and products to access green finance and policy support.
• Using free trade zones and international cooperation platforms to access global talent and capital.

For assistance with company registration and 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.