Published by ChinaMNC · Huyi

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

A practical guide for foreign founders to China's latest policy framework on new quality productive forces, covering innovation, industrial upgrading, digital transformation, green development, and financing.

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

The Central Committee of the Communist Party of China and the State Council have issued a major policy document on developing new quality productive forces—a framework that signals where China's economy is headed and what foreign founders should understand when registering or operating a company in China.

What Are 'New Quality Productive Forces'?

The policy positions new quality productive forces as being led by scientific and technological innovation, with a substantial rise in total factor productivity as the core marker. It aims to drive revolutionary technological breakthroughs, innovative allocation of production factors, and deep industrial transformation and upgrading. The guiding principles include:

• Innovation-led development, with reform as the key and measures tailored to local conditions
• Pursuing high technology, high efficiency, and high quality
• Balancing the roles of government and market, quality and business formats, reform and development, self-reliance and openness
• Coordinating development and security

The document calls for advancing innovation in technology, industry, development models, institutions, and talent mechanisms, and for creating a favorable ecosystem that supports deep integration of technological and industrial innovation.

Strengthening Original and Disruptive Innovation

The policy emphasizes organizing major science and technology projects focused on strategic, landmark, and leading products. It combines goal-oriented and free exploration, supports basic research, and calls for coordinated construction of science and technology platforms and major infrastructure with open sharing. It also highlights the need to strengthen original theoretical research and innovation in key generic technologies, frontier technologies, modern engineering technologies, and disruptive technologies.

For foreign founders, this signals that research-intensive ventures in cutting-edge fields may find a supportive policy environment, though specific incentives are not detailed in the source.

Breaking Through Key Core Technologies

The document leverages the new nationwide system to organize action plans for high-quality development of key manufacturing supply chains and industrial innovation projects in priority areas. It stresses full-chain breakthroughs, all-factor support, and full-ecosystem development. It also calls for implementing policies for first-of-a-kind and first-batch applications to promote technology iteration and upgrading.

Building National Strategic Science and Technology Capabilities

The policy outlines roles for national laboratories, research institutions, high-level research universities, and leading technology enterprises. It calls for gradually establishing compensation systems for universities and research institutes that stimulate innovation, are knowledge-value oriented, and are well-regulated. It allows research-type public institutions to adopt more flexible management systems and encourages leading tech enterprises to play a key role in integrating innovation, industrial, capital, and talent chains.

Reinforcing Enterprises' Principal Role in Innovation

A key section focuses on enterprises as the main body of technological innovation. Measures include:

• Strengthening inclusive incentive policies and establishing a corporate R&D reserve system
• Encouraging small and medium-sized tech enterprises to increase R&D investment
• Raising the super deduction ratio for enterprise R&D expenses
• Elevating qualifying corporate R&D projects to national projects
• Encouraging capable private enterprises to lead national major technological breakthroughs
• Establishing mechanisms for user assessment of outcomes and strengthening enterprises' role in commercialization
• Improving institutional arrangements for state-owned enterprises to pursue original innovation
• Supporting the development of specialized and sophisticated SMEs

Accelerating Commercialization of Scientific and Technological Achievements

The policy leverages China's super-large market advantage to match technology with markets and promote large-scale application of new technologies, products, and scenarios. It calls for building concept validation and pilot testing platforms, and for a whole-process evaluation mechanism for science and technology projects—deploying R&D and commercialization tasks together at project approval and assessing application performance at acceptance. It encourages universities and research institutes to license achievements to SMEs on a use-first, pay-later basis, and supports large enterprises opening their supply chains to SMEs. It also highlights using artificial intelligence to transform research paradigms.

Transforming and Upgrading Traditional Industries

The document stresses consolidating the foundation of the real economy and China's manufacturing strength. It supports enterprises using digital, intelligent, and green technologies to upgrade traditional industries. Key actions include:

• Industrial base re-engineering
• Major technical equipment breakthroughs
• Major manufacturing technological transformation and upgrading
• Large-scale equipment renewal

It also calls for strengthening financial support for technological transformation, implementing tax incentives for such investment, promoting intelligent and green manufacturing, and enhancing quality and brand building. In agriculture, it lists actions for grain capacity, seed industry revitalization, smart agriculture, high-quality agricultural machinery, and modern facility agriculture. For services, it calls for expanding and upgrading producer services toward specialization and higher value chains, and making consumer services higher quality, more diverse, and more convenient.

Cultivating Emerging Industries

The policy aims to build emerging pillar industries and accelerate the development of strategic emerging industries, including:

• Next-generation information technology
• New energy and new materials
• Intelligent connected new energy vehicles
• Robotics
• Biomedicine
• High-end equipment
• Aerospace

It encourages building distinctive strategic emerging industry clusters and deepening professional division of labor within industries and products to avoid 'involution-style' competition. It also supports cross-regional industrial collaboration, with eastern regions helping central, western, and northeastern regions develop emerging industries suited to local conditions. It mentions promoting the healthy and orderly development of the low-altitude economy and commercial aerospace under safety conditions.

Laying Out Future Industries

The document calls for exploring diverse technology routes, typical application scenarios, viable business models, and market regulation rules for future industries, including:

• Quantum technology
• Biomanufacturing
• Hydrogen and nuclear fusion energy
• Brain-computer interfaces
• Embodied intelligence
• 6G mobile communications

It proposes establishing investment growth and risk-sharing mechanisms for future industries, using existing fiscal policies, and guiding social capital to increase investment.

Deep Integration of Real and Digital Economies

The policy aims to improve data property rights, market transactions, benefit distribution, and interest protection systems. It calls for pilot demonstration projects for data factors, optimizing national data infrastructure, and deepening manufacturing digital transformation. It lists projects such as 'East Data, West Computing', smart manufacturing, and industrial internet innovation, and building a national integrated computing network and national blockchain network. It also calls for improving policies for digital industrialization and industrial digitalization, and building internationally competitive digital industry clusters.

Full Implementation of the 'AI+' Initiative

The document calls for advancing AI's transformation of traditional industries and accelerating application scenarios for next-generation intelligent terminals such as intelligent connected new energy vehicles, AI phones and computers, and humanoid robots. It emphasizes breakthroughs in basic theories and core technologies, and strengthening the supply of computing power, algorithms, and data. It calls for laying out national AI industry application pilot bases and high-value application scenarios by industry and local conditions, and building technology monitoring, risk warning, and emergency response systems to ensure AI is safe, reliable, and controllable.

Green and Low-Carbon Circular Development

The policy aims to build a green, low-carbon, and circular economic system. It calls for strengthening green manufacturing, developing green services, and expanding the green energy industry. It combines source reduction, process control, and efficient end-of-pipe treatment, and promotes green technological innovation and application. It also calls for improving green consumption incentives, certification and labeling systems, and building zero-carbon factories and parks. It proposes improving resource management and waste recycling systems.

On policies, it calls for fiscal, financial, investment, price, technology, and environmental policies that promote green development. It mentions improving mechanisms for realizing the value of ecological products, implementing dual control of carbon emissions总量 and intensity, and improving carbon emissions statistics, standards, labeling, and footprint management systems. It also calls for improving carbon pricing with the national carbon market as the main body, expanding its coverage, optimizing allowance allocation, accelerating the voluntary emission reduction market, and improving the national green certificate market. It encourages financial institutions to provide diverse green financial products and calls for green government procurement and tax systems.

Advancing the Energy Revolution

Focusing on carbon peak and carbon neutrality goals, the policy calls for orderly development of advanced nuclear fission energy, building a high-proportion renewable energy power system, improving policies for renewable energy consumption and regulation, organizing major application demonstrations, and accelerating green energy use across society. It also calls for international cooperation.

Deepening Reform for Closer Integration of Technology and Economy

The policy calls for deploying science and technology tasks in major national projects as needed, improving demand-oriented topic selection, management systems with consistent responsibilities and rights, and application-oriented evaluation. It deepens reform of property rights and separate asset management for job-related scientific and technological achievements. It allows qualified state-owned enterprises to adopt various forms of incentives. It also calls for building an open, shared, and secure national integrated data market and a technology market with efficient transformation.

Improving Market Regulation

The document calls for improving market access, strengthening anti-monopoly and anti-unfair competition enforcement, and enhancing governance in areas such as AI and biology. It promotes cross-departmental joint supervision, innovative regulatory methods, fewer on-site inspections, and data-driven regulation. It also calls for an efficient intellectual property management system, punitive damages, and research on tax systems suited to new business forms.

Increasing Financial Innovation Products

The policy encourages and regulates angel investment, venture capital, and private equity, and calls for better leveraging government investment funds. It improves support policies for long-term capital to invest early, in small firms, for the long term, and in hard technology, and to expand patient capital. It encourages banks to develop loan products suited to new quality productive forces, enriches science and technology innovation bond products, supports qualified tech enterprises to list and finance, and optimizes M&A and equity incentive systems. It also calls for insurance products covering the entire innovation chain and exploring technology leasing.

Allocating Advanced Production Factors Globally

This section is particularly relevant for foreign founders. The policy calls for expanding high-level opening up and using global markets. It encourages free trade pilot zones to leverage their location, resources, and industrial advantages to gather advanced production factors from home and abroad. It promotes platforms such as jointly built science parks, 'Belt and Road' joint laboratories, and international advanced technology application centers, and calls for actively building a global innovation cooperation network. It also encourages foreign venture capital institutions and international standards organizations to develop in China. It calls for establishing an efficient, convenient, and secure cross-border data flow mechanism.

Talent Development

The policy calls for integrated reform of education, science and technology, and talent systems. It promotes higher education quality and expansion, develops new research-oriented universities, and optimizes discipline and major settings based on industrial and technological trends. It promotes high-quality modern vocational education and an integrated work-study skills training model. It encourages enterprises and universities to jointly customize talent training and supports master craftsmen and highly skilled personnel to serve as part-time vocational school instructors.

Key takeaways for foreign founders: The policy environment favors innovation-driven, high-tech, and green ventures; emphasizes enterprise-led R&D with fiscal incentives; encourages foreign participation in science parks and venture capital; and signals support for cross-border data flows. However, specific implementation details and local variations should be confirmed with professional advisors.

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