Published by ChinaMNC · Yanta

China’s New Push for ‘New Quality Productive Forces’: What Foreign Founders Need to Know

A practical guide for foreign founders on China’s official policy direction for developing new quality productive forces, highlighting areas of opportunity and regulatory focus.

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

The Chinese government has issued a major policy document outlining its vision for developing “new quality productive forces.” For foreign founders building or operating a company in China, this policy signals where the government intends to concentrate resources, remove bottlenecks, and open opportunities—and where regulatory scrutiny may increase. Below is a summary of the key directions, framed as practical guidance.

What Are “New Quality Productive Forces”?

The policy defines new quality productive forces as being driven by technological innovation and marked by a substantial rise in total factor productivity. It calls for revolutionary technological breakthroughs, innovative allocation of production factors, and deep industrial transformation and upgrading. In practice, this means China will prioritize high-tech, high-efficiency, and high-quality development, with a strong emphasis on innovation-led growth.

For foreign founders, the policy’s core message is that China wants to deepen the integration of scientific and technological innovation with industrial innovation. This creates a more supportive ecosystem for companies engaged in advanced technology, but also implies that businesses will be encouraged to align with national priorities.

Strengthening Original and Disruptive Innovation

The policy emphasizes original and disruptive scientific and technological innovation. It calls for major science and technology projects focused on strategic, landmark, and leading products. It also supports organized basic research and application-oriented basic research to address weaknesses in technical and engineering sciences, while backing free exploration in basic research.

For foreign founders, this suggests that R&D activities in China—especially those involving cutting-edge fields—may find a more receptive policy environment. The government plans to coordinate the construction of science and technology platforms, major scientific infrastructure, and open sharing to avoid duplication. It also mentions implementing programs for breakthroughs in basic and interdisciplinary disciplines.

Breakthroughs in Key Core Technologies

China will leverage its new nationwide system to organize major actions in key manufacturing supply chains and industrial innovation projects. The policy highlights full-chain research, all-factor support, and ecosystem development. It also mentions policies for first-of-a-kind and first-batch applications to promote technology iteration.

Foreign founders in manufacturing or hardware should note that the policy encourages the application of new technologies and products, which could create opportunities for pilot projects and early adoption, provided they meet relevant standards.

Enterprises as the Main Body of Innovation

The policy seeks to strengthen the principal role of enterprises in technological innovation. It mentions establishing a corporate R&D reserve system, increasing the proportion of R&D expense super-deduction, and encouraging small and medium-sized technology enterprises to increase R&D investment. It also supports capable private enterprises in leading national major technology攻关 tasks and supports the development of specialized and sophisticated SMEs.

For foreign founders, this indicates that R&D incentives and tax deductions may be available, and that private enterprises—including foreign-invested ones—are encouraged to participate in national science and technology programs. Practical steps could include reviewing eligibility for R&D tax incentives and considering collaboration with universities or research institutes.

Accelerating Commercialization of Scientific Results

The policy calls for using China’s super-large market to connect technology with the market and to promote the large-scale application of new technologies, products, and scenarios. It mentions building platforms for proof-of-concept and pilot testing, and opening application scenarios. It also encourages universities and research institutes to license results to SMEs on a “use first, pay later” basis, and encourages large enterprises to open their supply chains to SMEs.

Foreign founders can explore opportunities in pilot testing, demonstration projects, and supply chain partnerships. The policy also highlights using artificial intelligence to transform research paradigms and improve efficiency.

Transforming Traditional Industries

The policy stresses upgrading traditional industries using digital, intelligent, and green technologies. It lists mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction as sectors to maintain and enhance in global division of labor. It also mentions projects for industrial base reconstruction, major technical equipment, and large-scale equipment renewal, with financial support and tax incentives for technological transformation.

Foreign founders in these sectors may find opportunities in equipment upgrading, smart manufacturing, green manufacturing, and service-oriented manufacturing. Agriculture also receives attention, with actions for grain capacity, seed industry, smart agriculture, and agricultural machinery.

Cultivating Emerging and Future Industries

The policy identifies strategic emerging industries including next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment, and aerospace. It encourages building distinctive industrial clusters and avoiding “involutionary” competition. It also supports the healthy and orderly development of the low-altitude economy and commercial aerospace under safety conditions.

Looking ahead, the policy calls for exploring multiple technology routes, application scenarios, business models, and regulatory rules for future industries such as quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and 6G. It mentions establishing investment growth and risk-sharing mechanisms and guiding social capital.

Foreign founders in these deep-tech fields should monitor regulatory developments and consider participating in pilot programs or clusters.

Deep Integration of the Real Economy and Digital Economy

The policy aims to improve data property rights, market transactions, benefit distribution, and interest protection. It mentions pilot demonstration projects for data factors, optimizing national data infrastructure, and deepening manufacturing digital transformation. Projects include “East Data, West Computing,” smart manufacturing, and industrial internet innovation, building a national integrated computing network and national blockchain network.

For foreign founders, data-related compliance and infrastructure access will be important. The policy also announces a comprehensive “AI+” action, promoting AI application in traditional industries, intelligent connected vehicles, AI phones and computers, and humanoid robots. It calls for breakthroughs in basic theories and core technologies, and strengthening the supply of computing power, algorithms, and data. It also plans to build a system for technology monitoring, risk warning, and emergency response to ensure AI is safe, reliable, and controllable.

Green and Low-Carbon Development

The policy outlines building a green, low-carbon, and circular economic system. It promotes green manufacturing, green services, and green energy industries. It calls for green transformation of key industries, green technology innovation, and application of advanced green technologies. It mentions building zero-carbon factories and parks, improving resource management, and waste recycling.

It also lists policy tools: fiscal, financial, investment, price, technology, and environmental policies. It mentions a carbon emissions dual control system, carbon statistics and accounting, product carbon labeling, and carbon footprint management. It plans to expand the national carbon market, optimize allowance allocation, accelerate the voluntary emission reduction market, and improve the national green certificate market. Financial institutions are encouraged to provide diverse green financial products.

Foreign founders in energy-intensive or green-tech sectors should prepare for carbon reporting and explore green finance options.

Reforms to Support Innovation

The policy calls for deepening reforms to closely integrate science and technology with the economy. It mentions deploying science tasks in major national projects, reforming the empowerment of职务 scientific and technological achievements, and allowing eligible state-owned enterprises to adopt various incentives. It also plans to build an open, shared, and secure national integrated data market and a technology market.

On market regulation, it calls for improving market access, strengthening anti-monopoly and anti-unfair competition, and enhancing governance in AI and biology. It mentions cross-departmental joint supervision, innovative regulatory methods, and reducing on-site inspections, exploring “data-based decision-making and management.” It also mentions improving intellectual property management and punitive damages, and studying tax systems suitable for new business forms.

Foreign founders should note the emphasis on IP protection and the potential for more data-driven regulation.

Financial Innovation and Global Talent

The policy encourages angel investment, venture capital, and private equity, and better leveraging government investment funds. It supports long-term capital investing early, small, and in hard tech, and growing patient capital. Banks are encouraged to develop loan products suited to new quality productive forces. It mentions enriching science and technology innovation bond products, supporting qualified tech firms to list and finance, and optimizing M&A and equity incentive systems. Insurance products covering the entire innovation chain and technology leasing are also mentioned.

In terms of global factor allocation, the policy encourages free trade zones to cluster advanced production factors, and supports platforms such as joint science parks, “Belt and Road” joint laboratories, and international advanced technology application centers. It encourages foreign venture capital institutions and international standards organizations to develop in China, and establishes a mechanism for efficient, convenient, and secure cross-border data flow.

Finally, the policy addresses talent: reforming education, science, and talent systems; improving higher education; developing new research universities; optimizing disciplines; promoting vocational education; and encouraging enterprises and universities to jointly cultivate talent.

Practical Takeaways for Foreign Founders

• Align with priority sectors: Emerging industries, future industries, green technology, and digital economy are areas of focus.
• Leverage R&D incentives: Explore R&D tax deductions and participation in national programs.
• Prepare for data and AI regulation: Compliance will be key as data markets and AI governance develop.
• Engage in pilot programs: Proof-of-concept, pilot testing, and application scenarios offer entry points.
• Monitor financial and talent policies: New financing tools and talent programs may become available.

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