Published by ChinaMNC · Xuyi

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,” highlighting R&D incentives, sector opportunities, and compliance considerations for company registration and operations.

China’s Push for “New Productive Forces”: Key Takeaways for Foreign Founders

China’s central government has issued a major policy opinion on developing “new productive forces” — a framework that prioritizes technological innovation, advanced manufacturing, and green transition. For foreign founders registering or operating a company in China, this policy signals areas of likely government support and regulatory focus. Below is a practical summary of the source document, rewritten for an international business audience.

1. Innovation at the Core

The policy calls for strengthening original and disruptive scientific research, breakthroughs in core technologies, and better coordination of national strategic scientific forces. It emphasizes making enterprises the main drivers of technological innovation. Specific measures include:

• Encouraging higher R&D spending by technology SMEs and raising the ratio for additional tax deductions on enterprise R&D expenses.
• Allowing qualified private enterprises to lead national major technical攻关 tasks.
• Establishing a user-based evaluation mechanism to promote the commercialization of research results.
• Supporting specialized and sophisticated SMEs (“专精特新”).

Foreign founders in tech sectors may find opportunities to participate in these programs, particularly if their work aligns with national priorities.

2. Sector Opportunities

The policy identifies several strategic emerging industries for accelerated development:

• Next-generation information technology
• New energy and new materials
• Intelligent connected new energy vehicles
• Robotics
• Biomedicine
• High-end equipment
• Aerospace

It also calls for the healthy and orderly development of the low-altitude economy and commercial aerospace, subject to safety conditions.

For future industries, the document lists quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and 6G mobile communications. The policy encourages diverse technological routes, typical application scenarios, viable business models, and market supervision rules, and proposes mechanisms for investment growth and risk sharing.

3. Digital and AI Integration

A dedicated section focuses on the “AI+” initiative, promoting AI application across traditional industries and the development of next-generation intelligent terminals such as intelligent connected vehicles, AI phones and computers, and humanoid robots. The policy also emphasizes data as a production factor, with measures to improve data property rights, market transactions, and benefit distribution. It calls for building a national integrated computing network and blockchain network.

Foreign founders in AI, big data, or digital services should note the policy’s emphasis on safety, reliability, and controllability, as well as the development of monitoring and risk-warning systems.

4. Green Transition

The document outlines a green, low-carbon, and circular economic system. Key points include:

• Developing green manufacturing and green services, and expanding the green energy industry.
• Building zero-carbon factories and parks.
• Improving carbon pricing, expanding the national carbon market, and developing a voluntary emission reduction trading market.
• Encouraging financial institutions to offer diverse green financial products.

Foreign companies in renewable energy, energy efficiency, or environmental technology may find aligned incentives.

5. Reforms to Support Innovation

The policy proposes several institutional reforms relevant to business operations:

• Deepening reforms to grant researchers greater ownership of job-related scientific achievements.
• Improving market supervision, including antitrust and anti-unfair competition enforcement, and strengthening governance in AI and biology.
• Exploring “data-driven decision-making and management” regulatory models to reduce on-site inspections.
• Enhancing intellectual property protection with punitive damages.

These reforms could affect how foreign-invested enterprises protect their IP and interact with regulators.

6. Financial Support for Innovation

The policy encourages angel investment, venture capital, and private equity, with a focus on long-term capital for early-stage, small, and hard-tech ventures. It also calls for:

• Bank loan products tailored to new productive forces.
• Expanding science and technology innovation bonds.
• Supporting qualified tech companies to list and raise funds.
• Developing insurance products covering the entire innovation chain and exploring technology leasing.

Foreign founders seeking funding in China may benefit from these evolving financial channels.

7. Global Talent and Open Innovation

The policy promotes higher-level opening up and global allocation of advanced production factors. It encourages free trade zones to cluster domestic and foreign advanced factors, supports joint science parks, “Belt and Road” joint laboratories, and international advanced technology application centers. It also welcomes foreign venture capital institutions and international standards organizations to develop in China, and calls for efficient, convenient, and secure cross-border data flow mechanisms.

For foreign founders, this suggests a more open environment for international R&D collaboration and data management, though specific implementation will vary.

8. Talent Development

The document emphasizes reforming education, science, and talent systems together. It supports new research universities, modern vocational education, and enterprise-university customized training. High-skilled talent is encouraged to teach in vocational schools.

Foreign companies may find it easier to collaborate with universities and vocational institutions for talent pipelines.

Practical Implications for Foreign Founders

While the policy is broad, it signals clear priorities. Foreign founders should consider:

• Aligning their business scope with encouraged sectors (e.g., high-tech, green, digital) to potentially access incentives.
• Monitoring local implementation, as many measures will be carried out by provincial and municipal governments.
• Engaging with free trade zones and industrial parks that may offer pilot programs.
• Ensuring compliance with evolving rules on data, AI, and antitrust.
• Exploring R&D tax incentives and government funding opportunities.

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