Published by ChinaMNC · Beiliu

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

A practical guide for foreign founders on China’s latest policy direction to develop new quality productive forces, covering R&D incentives, market access, and sector opportunities.

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

The Chinese government has issued a major policy document on developing “new quality productive forces” (新质生产力), outlining priorities for innovation-driven growth. 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 points relevant to foreign-invested enterprises.

What Are ‘New Quality Productive Forces’?

According to the document, new quality productive forces are characterized by high technology, high efficiency, and high quality. The policy emphasizes scientific and technological innovation as the core driver, with a focus on raising total factor productivity. It calls for breakthroughs in technology, innovative allocation of production factors, and deep industrial transformation. The overarching goal is to create production relations better suited to these forces and foster an ecosystem where technological and industrial innovation are deeply integrated.

Strengthening Original and Disruptive Innovation

The policy directs resources toward strategic, landmark, and leading products, with major science and technology projects organized around world frontiers, economic priorities, national needs, and public health. It supports both goal-oriented and free-exploration basic research, and calls for systematic construction of major science infrastructure with open sharing. Foreign founders in R&D-intensive sectors may find opportunities to participate in publicly supported platforms and collaborative projects.

Key Technology Breakthroughs and Enterprise-Led Innovation

China will leverage its “new system for mobilizing resources nationwide” to organize breakthroughs in core technologies, including actions for high-quality development of key manufacturing supply chains. Policies for first-of-their-kind and first-batch applications are to be implemented to accelerate technology iteration. Importantly, the policy strengthens the principal role of enterprises in technological innovation: it encourages increased R&D investment by small and medium-sized tech firms, raises the R&D expense super-deduction ratio, and allows eligible private enterprises to lead national major technology tasks. A user-evaluation mechanism for outcomes is to be established, reinforcing enterprises’ role in commercialization.

Commercializing Research and Scaling Applications

To bridge the gap between R&D and market application, the policy calls for large-scale application demonstrations of new technologies, products, and scenarios. It plans to build proof-of-concept and pilot-testing platforms and increase the openness of application scenarios. Universities and research institutes are encouraged to license research results to small and medium-sized enterprises on a “use first, pay later” basis. Large enterprises are encouraged to open their supply chains to smaller firms. Artificial intelligence is highlighted as a tool to transform research paradigms and improve efficiency.

Transforming Traditional Industries

While pursuing new sectors, the policy stresses upgrading traditional industries with digital, intelligent, and green technologies. It supports equipment renewal and technological transformation in mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction. Funding support and tax incentives for manufacturing technological upgrades are to be strengthened. The policy also covers agricultural modernization and the expansion and upgrading of services, including producer services moving up the value chain.

Growing Emerging and Future Industries

Foreign founders should note the priority sectors listed for strategic emerging industries: 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 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 6G. A risk-sharing mechanism and increased investment are planned for future industries.

Digital Economy and the ‘AI Plus’ Initiative

The document promotes deep integration of the real economy and digital economy, including data property rights, data element pilot programs, and construction of national computing networks. A nationwide “AI+” initiative aims to apply artificial intelligence across traditional industries and accelerate applications such as intelligent connected vehicles, AI phones and computers, and humanoid robots. The policy also emphasizes safe, reliable, and controllable AI, with monitoring and emergency response systems.

Green Transition and Energy Revolution

Green manufacturing, green services, and green energy are prioritized. The policy calls for green upgrades in key industries, zero-carbon factories and parks, and a circular economy for waste. It outlines fiscal, financial, investment, price, and environmental policies to support green development, including expanding the national carbon market and improving green electricity certificate markets. Financial institutions are encouraged to offer diverse green financial products. Energy revolution measures include developing advanced nuclear fission, building a high-share renewable power system, and improving new energy consumption policies.

Reforms to Support Innovation

Institutional reforms include deploying science tasks within major national projects, deepening reforms on job-related scientific and technological achievements, and allowing eligible state-owned enterprises to adopt various incentive forms. The policy also calls for a unified national data market and a technology market that facilitates efficient transformation. Market regulation reforms include improved market access, stronger anti-monopoly and anti-unfair competition enforcement, and governance for AI and biotechnology. A more efficient intellectual property management system with punitive damages is mentioned.

Financial and Talent Support

On financing, the policy encourages angel investment, venture capital, and private equity, with government investment funds playing a guiding role. It supports long-term capital investing early, small, and in hard tech, and calls for patient capital. Banks are encouraged to develop loan products suited to new quality productive forces, and bond and equity financing for tech firms is to be expanded. Insurance products covering the entire innovation chain and technology leasing are also mentioned. On talent, the policy promotes integrated reform of education, science, and talent systems, including new research universities, vocational education, and customized training partnerships between enterprises and universities.

Global Integration and Opening Up

For foreign founders, the international dimension is significant. The policy calls for expanding high-standard opening up and using global markets. Pilot free trade zones are encouraged to cluster advanced production factors from home and abroad. It supports joint science parks, Belt and Road joint laboratories, and international advanced technology application centers. Foreign venture capital institutions and international standards organizations are explicitly encouraged to develop in China. A mechanism for efficient, convenient, and secure cross-border data flow is to be established.

Practical Takeaways for Foreign Founders

• R&D incentives: Higher R&D super-deduction ratios and enterprise-led national projects may benefit foreign-invested firms with strong research capabilities.
• Sector focus: Strategic emerging and future industries listed in the policy are likely to receive policy support, from AI and robotics to biotech and new energy.
• Commercialization pathways: Proof-of-concept platforms, application scenarios, and “use first, pay later” licensing create opportunities for pilot projects.
• Green and digital: Green finance, carbon markets, and digital transformation initiatives offer new business avenues.
• Opening up: Encouragement for foreign VC and cross-border data flows signals a more welcoming environment for international players.

Foreign founders should monitor local implementation measures, as many policies will be tailored by region and sector. Engaging with local authorities and industry clusters can help identify specific incentives and pilot programs.

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 registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.