Published by ChinaMNC · Suyu

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

A practical breakdown of China’s policy on new quality productive forces, explaining what it means for foreign entrepreneurs registering and operating a company in China.

China’s Push for New Quality Productive Forces

The Central Committee of the Communist Party of China and the State Council have issued an opinion on developing new quality productive forces. For foreign founders, this policy signals where China is directing investment, innovation, and industrial upgrading. Understanding these priorities can help you align your business strategy with national goals and identify opportunities in emerging sectors.

The policy is guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and aims to implement the spirit of the 20th Party Congress and subsequent plenary sessions. It emphasizes innovation-led development, reform, and adapting to local conditions. The core marker is a substantial increase in total factor productivity, driven by technological breakthroughs, innovative allocation of production factors, and deep industrial transformation.

Key Priorities for Innovation

The policy outlines several areas where foreign founders can engage:

• Original and disruptive technological innovation: Focus on strategic, landmark products and major science projects. Support basic research and cross-disciplinary breakthroughs.
• Breaking through key core technologies: Leverage the new nationwide system to organize major industrial chain actions and apply first-of-its-kind policies.
• Building national strategic science and technology forces: Optimize the roles of national laboratories, research institutes, universities, and leading enterprises. Allow flexible management for research institutions.
• Strengthening enterprises’ role in innovation: Encourage corporate R&D investment, raise the super deduction ratio for R&D expenses, and let capable private enterprises lead national technology tasks.
• Commercializing科技成果: Use the large market to scale new technologies. Support proof-of-concept and pilot testing platforms, and promote licensing of科研成果 to SMEs with deferred payment.

Industrial Upgrading and Emerging Sectors

The policy aims to transform traditional industries while cultivating new ones:

• Upgrading traditional industries: Use digital, intelligent, and green technologies to upgrade mining, metallurgy, chemicals, textiles, machinery, shipbuilding, and construction. Implement major equipment renewal and technological transformation programs.
• Fostering emerging industries: Develop next-generation information technology, new energy, new materials, intelligent connected vehicles, robotics, biopharmaceuticals, high-end equipment, and aerospace. Build distinctive industrial clusters and avoid inefficient competition.
• Planning future industries: Promote quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G. Establish investment growth and risk-sharing mechanisms.
• Integrating digital and real economies: Improve data property rights and build national data infrastructure. Implement the “Eastern Data, Western Computing” project and develop internationally competitive digital clusters.
• AI Plus initiative: Advance AI application in traditional industries, intelligent connected vehicles, AI phones and computers, and humanoid robots. Build national AI application pilot bases and ensure safe, reliable, and controllable AI.
• Green development: Develop green manufacturing and services, build zero-carbon factories and parks, and improve carbon pricing and green finance.

Reforms to Support Innovation

Institutional reforms aim to create a better environment for businesses:

• Science-economy integration: Deploy science tasks in major projects, reform科技成果 ownership, and build a unified national data market.
• Market supervision: Improve market access, strengthen anti-monopoly and anti-unfair competition, and enhance cross-departmental supervision using data.
• Financial innovation: Encourage angel investment, venture capital, and private equity. Support patient capital and bank loans tailored to new quality productive forces. Enrich science and technology bond products and insurance.
• Global factor allocation: Expand high-level opening up. Encourage free trade zones to cluster advanced factors. Support joint science parks, Belt and Road joint laboratories, and international technology application centers. Welcome foreign venture capital institutions and international standards organizations. Establish efficient and secure cross-border data flow mechanisms.

Talent Development

The policy calls for integrated reform of education, science, and talent systems. It supports new research universities, modern vocational education, and customized talent training by enterprises and universities. High-skilled talent can serve as part-time vocational school instructors.

Implications for Foreign Founders

Foreign founders setting up a company in China can benefit from aligning with these priorities. Sectors such as AI, green energy, advanced manufacturing, and digital services are likely to receive policy support. The emphasis on enterprise-led innovation and financial reforms may ease access to funding and partnerships. The push for global factor allocation and cross-border data flows could facilitate international operations. However, founders should note that the policy also signals stronger supervision in areas like AI governance and anti-monopoly. It is advisable to monitor local implementation and seek professional advice.

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.