Published by ChinaMNC · Bei

China's New Quality Productive Forces Policy: What Foreign Founders Need to Know

A practical guide for foreign founders on China's official policy direction for developing new quality productive forces, covering innovation, industrial upgrading, the digital and green economy, finance, talent, and opening up.

Why This Policy Matters for Foreign Founders

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 registering or operating a company in China, the document signals where policy support, regulatory attention, and market opportunities are likely to concentrate. It is a strategic framework rather than a set of specific incentives, so treat it as a map of official priorities you can align your China entity with, not as a list of guaranteed benefits.

The guiding approach combines innovation-led growth with reform, adaptation to local conditions, and a sequence of building new capacity before dismantling old arrangements. The policy stresses high technology, high efficiency, and high quality, and calls for coordinating government and market, development and security, and self-reliance and openness. The stated core marker is a substantial rise in total factor productivity, achieved through technological breakthroughs, better allocation of production factors, and deep industrial upgrading.

Innovation and Technology: Where Support Is Directed

Basic and disruptive research

Policy attention is directed at original and disruptive technological innovation, organized around strategic and leading products. The document calls for a mix of goal-oriented and free-exploration research, stronger basic and applied basic research, coordinated science infrastructure that is openly shared, and programs targeting basic and interdisciplinary fields. It also emphasizes original theory, key generic technologies, frontier technologies, modern engineering, and disruptive innovation.

Key core technologies and national capacity

China intends to use its new system of mobilizing national resources to run high-quality development actions for manufacturing supply chains and industrial innovation projects in priority fields, with whole-chain and whole-ecosystem support. Policies for first-of-their-kind equipment and first-batch applications are to be implemented to speed up technology iteration. National laboratories, research institutes, research universities, and leading technology firms are to have their roles and布局 refined, and research-type public institutions may adopt more flexible management systems.

Enterprises as the main innovation actors

The document calls for broader incentive policies, a corporate R&D reserve fund system, and a stronger corporate role in research spending. Technology SMEs are encouraged to raise R&D investment, and the super-deduction rate for enterprise R&D expenses is to be increased. Enterprise projects meeting national strategic needs may be elevated to national projects, and capable private firms are encouraged to lead major national technology programs. State-owned enterprises are to have institutional arrangements for original innovation, and specialized, refined, distinctive, and innovative SMEs are to be supported.

Turning research into products

To connect technology with markets, the policy proposes large-scale demonstration of new technologies, products, and scenarios; concept validation and pilot-testing platforms; and evaluation of science projects across their full lifecycle, with application results assessed at acceptance. Universities and institutes may license results to smaller firms on a "use first, pay later" basis. Large enterprises are encouraged to open their supply chains to SMEs. Artificial intelligence is to be used to change research paradigms and improve efficiency.

Industrial Priorities: Traditional, Emerging, and Future Sectors

Upgrading traditional industries

The policy commits to the real economy and manufacturing strength. National standards are to guide upgrades, and firms are encouraged to apply digital, intelligent, and green technologies. Priority industries include mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction. Programs cover industrial base rebuilding, major technical equipment, manufacturing technology transformation, and large-scale equipment renewal, supported by funding and tax policies for technology upgrades. Smart, green, and service-oriented manufacturing are promoted alongside quality infrastructure and brand building. Agriculture actions cover grain capacity, seed industry revitalization, smart agriculture, agricultural machinery, modern protected agriculture, and agricultural science infrastructure. Services are to expand in capacity and quality, with producer services moving up the value chain and consumer services becoming more varied and convenient.

Emerging and future industries

Strategic emerging industries named include next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment, and aerospace. The document calls for distinctive, complementary clusters and deeper specialization within and across industries, while discouraging "involution-style" competition. Cross-regional cooperation mechanisms led by supply chains and enterprises are proposed, with eastern regions supporting central, western, and northeastern regions. The low-altitude economy and commercial space are to develop in an orderly way, subject to safety.

Future industries include quantum technology, biomanufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications. The policy proposes exploring multiple technology routes, application scenarios, business models, and market supervision rules, plus investment growth and risk-sharing mechanisms that use existing fiscal policy and guide private capital.

Digital economy and AI

Data property rights, market trading, benefit distribution, and rights protection systems are to be improved, with pilot programs for data factors. National data infrastructure is to be optimized, manufacturing digital transformation deepened, and projects such as "East Data, West Computing," smart manufacturing, and industrial internet innovation implemented, alongside a national integrated computing network and a national blockchain network. An "AI+" action promotes AI adoption in traditional industries and new intelligent terminals, including intelligent connected vehicles, AI phones and computers, and humanoid robots. The policy calls for breakthroughs in basic theory and core technology and efficient supply of computing power, algorithms, and data, with national AI industry application pilot bases and high-value scenarios, plus monitoring, risk warning, and emergency response systems.

Green development

Green manufacturing, green services, and the green energy industry are to be strengthened, with source reduction, process control, and end-of-pipe treatment combined. The document mentions green consumption incentives, green product certification and labeling, zero-carbon factories and parks, resource management, and waste recycling. Fiscal, financial, investment, price, technology, and environmental policies are to support green low-carbon development. It also references carbon emissions dual control, carbon accounting and standards, product carbon labeling and footprint systems, a national carbon market with a broader coverage and optimized allowance allocation, a voluntary emission reduction market, a unified green certificate market, green financial products, green procurement, green taxation, and green-oriented agricultural subsidies. On energy, it calls for orderly advanced nuclear fission, a high-share renewable power system, better renewable consumption and dispatch measures, and international cooperation.

Institutions, Finance, and Opening Up

Market and regulatory reform

Reforms aim to link science and the economy more closely: science tasks deployed within major national projects, demand-oriented topic selection, responsibility-matched management, application-oriented evaluation, and reform of职务 science achievement rights and separate asset management. Qualified state-owned enterprises may use various incentives. A national integrated data market is to be open, shared, and secure, alongside an efficient technology market. Market access rules, antitrust, and anti-unfair competition enforcement are to be improved, with governance for AI and biology, cross-department supervision, fewer on-site inspections, data-based supervision, stronger intellectual property management, punitive damages, and tax rules suited to new business forms.

Finance for innovation

The policy encourages angel investment, venture capital, and private equity, with government investment funds playing a guiding role. Support policies are to favor long-term capital that invests early, small, long-term, and in hard technology, strengthening patient capital. Banks are encouraged to develop loan products suited to new quality productive forces. Science and technology bond products are to be enriched, quality technology firms supported in listing and financing, and merger, restructuring, and equity incentive rules optimized. Insurance products covering the innovation chain and technology leasing are mentioned.

Global talent and factor allocation

Opening up is to be expanded, with free trade zones clustering advanced production factors based on location, resources, and industry strengths. Multilateral and bilateral mechanisms are to support jointly built science parks, Belt and Road joint laboratories, and international advanced technology application centers, building a global innovation cooperation network. China aims to lead and join international big science programs and projects, encourage foreign venture capital institutions and international standards organizations to develop in China, and establish efficient, convenient, and secure cross-border data flow mechanisms. On talent, the document calls for integrated reform of education, science, and talent systems, better higher education, new research universities, adjusted academic programs, high-quality vocational education, work-study training, and customized programs jointly run by firms and universities, with master craftsmen and highly skilled workers teaching in vocational schools.

Practical Takeaways for Foreign Founders

• Map your China business to named priority sectors—AI, robotics, new energy, biomedicine, aerospace, green manufacturing, and future industries—when planning investment and partnerships.
• Expect policy attention to enterprise R&D, technology transfer from universities, pilot testing, and application scenarios.
• Watch regulatory development in data, AI, antitrust, and intellectual property, and prepare compliance accordingly.
• Consider how free trade zones, cross-border data mechanisms, and opening-up measures may fit your entity structure.
• Treat this as directional information; confirm details with local authorities and professional advisers.

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