Published by ChinaMNC · Douanyaozu

China’s New Productivity Policy: A Guide for Foreign Founders

A practical guide for foreign founders on how China’s new productivity policy affects company registration, operations, and growth opportunities in key technology and industrial sectors.

Introduction

China’s central government has issued a policy framework to develop “new quality productive forces” (新质生产力), emphasizing innovation-driven growth, industrial upgrading, and deeper integration of technology with the real economy. For foreign founders registering or operating a company in China, this policy signals priority areas and regulatory direction that can shape business strategy. Below is a practical summary of the key measures, framed for foreign entrepreneurs.

1. Strengthen Original and Disruptive Innovation

The policy calls for major science and technology projects focused on strategic, landmark, and leading products. It supports both goal-oriented and free-exploration basic research, and plans to build major science infrastructure with open sharing. Foreign founders in deep tech should note the emphasis on original theory, key generic technologies, and disruptive innovation.

Implications for founders:

• Align R&D with national priorities in strategic sectors.
• Explore partnerships with universities and research institutes engaged in basic research.
• Leverage open scientific infrastructure where available.

2. Break Through Key Core Technologies

Using a new nationwide mobilization system, China will organize high-quality development actions for key manufacturing supply chains and industrial innovation projects. The policy supports first-of-its-kind and first-batch application policies to accelerate technology iteration. Foreign founders in advanced manufacturing may find opportunities in these supply chain upgrade initiatives.

3. Coordinate National Strategic Science and Technology Forces

National laboratories will play a greater role in major projects and innovation platforms. The policy aims to optimize the positioning and layout of national research institutes, high-level research universities, and leading technology enterprises. It also mentions more flexible management systems for research-type public institutions and compensation systems that reward knowledge value.

For foreign founders:

• Consider collaboration with national research institutes and universities.
• Be aware that leading technology enterprises are expected to integrate innovation, industry, capital, and talent chains.

4. Reinforce Enterprises’ Role in Innovation

The policy strengthens incentives for enterprise R&D, including a system for enterprise R&D reserves and increased R&D expense super-deduction ratios. Enterprise R&D projects that meet national strategic needs can be elevated to national projects. Capable private enterprises are encouraged to lead major national technology tasks. The policy also supports specialized and sophisticated SMEs.

What this means for foreign-invested enterprises:

• Review eligibility for R&D tax incentives.
• Consider applying for national science and technology programs if your project aligns with strategic needs.
• Position your company to participate in supply chains as a specialized supplier.

5. Accelerate Commercialization of Scientific Results

The policy emphasizes using China’s large market to connect technology with market demand. It plans demonstration actions for new technologies, products, and scenarios, and supports concept validation and pilot testing platforms. Universities and research institutes are encouraged to license results to SMEs on a “use first, pay later” basis. Large enterprises are encouraged to open their supply chains to SMEs.

Practical steps:

• Explore licensing opportunities with Chinese universities.
• Participate in application scenario demonstrations.
• Engage with large enterprises to access supply chain opportunities.

6. Upgrade Traditional Industries

China will use national standards to guide traditional industry upgrades, supporting digital, intelligent, and green technologies. Key industries include mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction. The policy also mentions agricultural modernization and service sector upgrading.

For foreign founders:

• Consider providing digital or green solutions to traditional industries.
• Look for opportunities in agricultural technology and modern services.

7. Cultivate Emerging Industries

Priority emerging industries include next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment, and aerospace. The policy encourages distinctive industrial clusters and cross-regional cooperation, while avoiding “involutionary” competition. Low-altitude economy and commercial space are to develop in an orderly manner under safety conditions.

Opportunities:

• Set up operations in emerging industry clusters.
• Participate in cross-regional industrial collaboration.

8. Plan for Future Industries

The policy calls for exploring multiple technology routes and business models for future industries such as quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and 6G. It establishes mechanisms for investment growth and risk sharing, and encourages social capital.

For deep-tech founders:

• Consider R&D presence in these future-oriented fields.
• Seek government guidance funds and social capital partnerships.

9. Integrate Real and Digital Economies

Data property rights, market trading, and benefit distribution systems will be improved. Pilot projects for data elements will be implemented. National data infrastructure will be optimized, including the “East Data West Computing” project, smart manufacturing, industrial internet, and a national computing network. Digital industry clusters with international competitiveness are encouraged.

For tech founders:

• Leverage data infrastructure and pilot programs.
• Participate in industrial internet and smart manufacturing initiatives.

10. Implement “AI+” Action

The policy promotes AI application in traditional industries, intelligent connected vehicles, AI phones and computers, and humanoid robots. It supports AI technology innovation, computing power, algorithms, and data supply. National AI industry application pilot bases and high-value scenarios will be established. Safety, reliability, and controllability of AI are emphasized.

For AI founders:

• Explore AI application scenarios in traditional industries.
• Engage with national pilot bases for AI applications.

11. Green and Low-Carbon Development

The policy aims to build a green, low-carbon circular economy. It supports green manufacturing, green services, and green energy. Green consumption incentives, certification, and labeling systems will be improved. Zero-carbon factories and parks will be built. The policy also covers carbon markets, green finance, and energy revolution.

For green tech founders:

• Participate in green supply chains and zero-carbon projects.
• Access green finance and carbon market mechanisms.

12. Reform for Technology-Economy Integration

Reforms include deploying science tasks in major projects, reforming职务科技成果赋权 (disposal rights for职务科技成果) and asset management, and building a national integrated data market. Market supervision will be improved, including AI and bio governance, and cross-departmental supervision using data.

Compliance note:

• Stay informed on data market and IP reforms.
• Adapt to new regulatory approaches in AI and bio sectors.

13. Financial Innovation

The policy encourages angel investment, venture capital, and private equity, with government funds playing a guiding role. It supports long-term capital for early-stage, small, long-term, and hard-tech projects. Banks are encouraged to develop loan products for new productivity. Bond markets and IPOs for tech enterprises are supported, along with insurance and technology leasing.

For founders:

• Explore venture capital and government-guided funds.
• Consider tech-specific loan and insurance products.

14. Global Allocation of Advanced Factors

China will expand high-level opening up. Free trade zones are encouraged to cluster advanced production factors. Platforms such as joint science parks, Belt and Road joint laboratories, and international advanced technology application centers will be promoted. Foreign venture capital institutions and international standard organizations are encouraged to develop in China. Cross-border data flow mechanisms will be established.

For foreign founders:

• Consider free trade zones for registration.
• Engage with international cooperation platforms.
• Monitor cross-border data flow policies.

15. Talent Development

The policy promotes integrated reform of education, science, and talent systems. Higher education will be expanded and optimized, with new research universities and adjusted academic programs. Vocational education will be improved, and enterprise-university customized training is encouraged. Skilled talent is to be cultivated in practice.

For foreign founders:

• Partner with universities for talent pipelines.
• Utilize vocational training programs.

Conclusion

China’s new productivity policy outlines a broad direction for innovation-driven development. Foreign founders can use this framework to identify priority sectors, access incentives, and align their China operations with national priorities. However, specific implementation details will vary by region and sector, so it is advisable to consult local authorities and professional advisors.

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.