Published by ChinaMNC · Fengshan

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

A practical overview of China’s latest policy direction on developing new productive forces, highlighting what foreign founders should know when registering and operating a company in China.

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

China’s central government has issued a broad policy framework on developing “new productive forces” — an economic agenda that emphasizes technological innovation, industrial upgrading, and deeper integration of technology with the real economy. For foreign founders considering company registration or expansion in China, the document signals where policy support and market opportunities are likely to concentrate. Below is a practical summary of the key areas relevant to foreign-invested enterprises.

Innovation and Technology

The policy places scientific and technological innovation at the center of economic development. It calls for stronger original and disruptive research, breakthroughs in core technologies, and better coordination of national strategic science and technology resources. For foreign founders, this suggests opportunities in R&D-intensive sectors where China aims to build domestic capabilities.

Enterprise role in innovation

The document emphasizes strengthening enterprises’ central role in technological innovation. It mentions expanding inclusive incentive policies, establishing a corporate R&D reserve system, and increasing the deduction ratio for enterprise R&D expenses. It also encourages capable private enterprises to lead national major technical breakthroughs. Foreign-invested companies may benefit from a policy environment that encourages corporate R&D investment, though specific eligibility and application procedures would need to be confirmed with local authorities.

Commercialization and application

The policy calls for accelerating the conversion of scientific and technological achievements into real productivity. Measures include demonstration actions for large-scale application of new technologies, products, and scenarios; building proof-of-concept and pilot testing platforms; and opening more application scenarios. It also encourages universities and research institutes to license科技成果 to small and medium-sized enterprises on a “use first, pay later” basis. For foreign founders, this points to potential collaboration opportunities with local research institutions and access to pilot testing infrastructure.

Industrial Priorities

The document outlines sector-specific priorities that may shape market demand and supply-chain development.

Traditional industries

The policy supports upgrading traditional industries using digital, intelligent, and green technologies. It lists mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction as sectors where China aims to maintain global competitiveness. It also mentions equipment renewal programs and tax incentives for technological transformation. Foreign founders in industrial technology, automation, or green manufacturing may find relevant opportunities.

Emerging industries

Strategic emerging industries highlighted include next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment, and aerospace. The policy encourages building distinctive industrial clusters and avoiding “involutionary” competition. It also mentions promoting the low-altitude economy and commercial space, subject to safety conditions. Foreign founders in these fields should note the emphasis on clustering and cross-regional coordination.

Future industries

The document calls for forward-looking布局 in future industries such as quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications. It mentions establishing investment growth and risk-sharing mechanisms and guiding social capital. This signals long-term policy attention, though commercial maturity varies by sector.

Digital and AI Integration

The policy promotes deep integration of the real economy and the digital economy. It calls for improving data property rights, market trading, and benefit distribution systems, and for pilot projects on data factors. It also mentions optimizing national data infrastructure and implementing the “East Data, West Computing” project, smart manufacturing, and industrial internet initiatives.

A dedicated section on the “AI+” action calls for advancing AI application in traditional industries, accelerating smart terminal applications such as intelligent connected vehicles, AI phones and computers, and humanoid robots. It also emphasizes breakthroughs in basic theory and core technologies, and strengthening supply of computing power, algorithms, and data. The policy mentions building national AI industry application pilot bases and high-value application scenarios, while establishing technology monitoring, risk warning, and emergency response systems to ensure AI is safe, reliable, and controllable. Foreign founders in AI, data services, and digital transformation should monitor implementing rules at local levels.

Green Development

The policy outlines a green, low-carbon, and circular economic system. It supports green manufacturing, green services, and green energy industries, and calls for green upgrades in key industries. It mentions building zero-carbon factories and parks, improving waste recycling, and implementing fiscal, financial, investment, price, technology, and environmental policies for green development.

Specific measures include a carbon emission total and intensity dual-control system, a carbon footprint management system, expanding the national carbon market, and developing green financial products. It also mentions promoting an energy revolution with high-proportion renewable energy power systems and orderly development of advanced nuclear fission energy. Foreign founders in clean energy, environmental technology, and green finance may find relevant policy signals.

Market Environment and Business Regulation

The document addresses reforms to better connect science and technology with the economy. It mentions deploying science tasks in national major projects, reforming职务科技成果 ownership, and building a unified national data market. It also calls for improving market supervision, including market access, anti-monopoly, and anti-unfair competition, and strengthening governance in AI and biology. It mentions exploring data-driven supervision and reducing on-site inspections. A more efficient intellectual property management system and punitive damages are also referenced. Foreign founders should expect continued regulatory attention to competition and new business models.

Finance and Investment

The policy encourages angel investment, venture capital, and private equity, and calls for better use of government investment funds. It mentions supporting long-term capital to invest early, in small companies, and in hard technology, and growing “patient capital.” It also encourages banks to develop loan products suited to new productive forces, enrich science and technology innovation bond products, support qualified tech companies to list and finance, and develop insurance products covering the entire innovation chain. For foreign founders, this suggests a financing environment that may offer more diverse options, though access conditions vary.

Global Talent and Open Innovation

The document emphasizes allocating advanced production factors globally. It encourages free trade zones to cluster domestic and foreign advanced factors based on location and industrial advantages. It mentions promoting joint science parks, “Belt and Road” joint laboratories, and international advanced technology application centers, and building a global innovation cooperation network. It also encourages foreign venture capital institutions and international standards organizations to develop in China. A efficient, convenient, and secure cross-border data flow mechanism is mentioned. These points are relevant for foreign founders considering R&D centers or cross-border data operations.

Talent Development

The policy calls for integrated reform of education, science and technology, and talent systems. It mentions improving higher education, developing new research universities, optimizing discipline settings, and promoting high-quality vocational education with work-study integration. It encourages enterprises and universities to jointly cultivate talent and supports skilled workers to teach in vocational schools. Foreign founders may find opportunities for industry-academia collaboration and talent recruitment, subject to local policies.

Practical Takeaways for Foreign Founders

• Focus sectors: Policy attention is concentrated on advanced manufacturing, AI and digital technologies, green energy, biomedicine, and future industries. These areas may offer more support and market demand.
• R&D incentives: Corporate R&D investment is encouraged, with mentions of R&D expense deductions and national project participation for qualified enterprises. Confirm eligibility with local authorities.
• Commercialization pathways: Pilot testing platforms, application scenarios, and university licensing may create collaboration opportunities.
• Financing options: Policy supports venture capital, tech bonds, and insurance products, but foreign access may require specific structures.
• Compliance: Market supervision, anti-monopoly, data, and AI governance are emphasized. Ensure your business model aligns with evolving rules.
• Cross-border data: A more efficient data flow mechanism is mentioned, but implementation details matter for operations involving data transfer.

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