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

A practical guide for foreign founders on how China's new policy direction for developing new productive forces affects company registration, R&D, manufacturing, and cross-border operations.

China's New Productive Forces Policy: A Practical Guide for Foreign Founders

The Chinese government has issued a major policy document on developing "new productive forces." For foreign founders building a company in China, the document signals where policy support, regulatory attention, and market access are heading. Below is a founder-focused summary of the source's main provisions, rewritten for practical use.

Core Policy Direction

The document frames development around innovation-led growth, reform, and adaptation to local conditions. It calls for coordinating the roles of government and market, linking development with security, and treating a substantial rise in total factor productivity as the central marker of progress. The stated aim is to advance technological breakthroughs, reconfigure production factors, and upgrade industries, while adjusting production relations to fit new productive forces and creating an ecosystem where technology and industrial innovation reinforce each other.

Science and Technology Priorities

Several provisions are relevant to founders with R&D operations:

• Original and disruptive innovation: Major science projects will target strategic, landmark, and leading products, combining goal-oriented research with free exploration, and supporting basic and interdisciplinary research.
• Critical and core technologies: The policy calls for organized breakthroughs along manufacturing supply chains, with full-chain and full-ecosystem support, including application policies for first-of-their-kind equipment and first-batch materials.
• National strategic science and technology capacity: National laboratories, research institutes, research universities, and leading tech firms are to have their roles and layout optimized, with more flexible management allowed for research-oriented public institutions.

Enterprise Innovation and Commercialization

Enterprises are positioned as central to technological innovation. The document mentions a corporate R&D reserve fund system, encouragement for small and medium-sized tech firms to increase R&D spending, and a higher super-deduction ratio for R&D expenses. Eligible private companies are encouraged to lead national major technology tasks. On commercialization, the policy promotes:

• Large-scale demonstration of new technologies, products, and application scenarios;
• Concept validation and pilot testing platforms, with more application scenarios opened up;
• Evaluation of the full project cycle, linking R&D and commercialization at project approval and assessing application results at acceptance;
• Licensing of university and institute results to small and micro firms on a "use first, pay later" basis;
• Opening large firms' supply chains to smaller firms;
• AI-driven changes in research methods.

Industry Focus Areas

The document sets out directions across traditional, emerging, and future industries. Traditional sectors such as mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, and construction are to be upgraded with digital, intelligent, and green technologies, supported by equipment renewal and tax policies for technological upgrading. 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 policy encourages differentiated clusters and cross-regional cooperation, and explicitly cautions against "involution-style" competition. It also supports low-altitude economy and commercial space, subject to safety conditions.

Future industries mentioned include quantum technology, biomanufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications, with mechanisms for investment growth and risk sharing.

Digital, Green, and AI Provisions

For digital operations, the policy addresses data property rights, data trading, and data infrastructure, and calls for continued development of the national integrated computing network and industrial internet. The "AI+" initiative covers application of AI across industries, including intelligent terminals, and calls for safe, reliable, and controllable AI through monitoring and risk-warning systems.

On green development, the document promotes green manufacturing and services, zero-carbon factories and parks, circular waste systems, and a policy toolkit covering fiscal, financial, investment, price, and environmental measures. It references expanding national carbon market coverage, a unified green certificate market, green financial products, and green procurement. It also calls for an orderly energy transition toward a high-share renewable power system.

Market Regulation and Finance

The policy signals changes relevant to compliance and funding:

• Market access and supervision: Market access rules are to be improved, with stronger antitrust and anti-unfair competition enforcement, governance in AI and biology, and greater use of data-based, cross-departmental supervision.
• Intellectual property: A comprehensive IP management system and punitive damages are mentioned.
• Finance: The document encourages angel investment, venture capital, and private equity; supports patient capital and long-term investment in early-stage and hard-tech ventures; encourages bank loan products suited to new productive forces; mentions science and technology bonds, listings for qualified tech firms, and insurance products covering the innovation chain.

Opening Up and Talent

Foreign founders should note the international provisions. The policy encourages free trade zones to attract advanced production factors based on local conditions; promotes joint science parks, Belt and Road joint laboratories, and international technology application centers; supports participation in international big-science programs; and encourages foreign venture capital institutions and international standards organizations to operate in China. It also calls for an efficient, convenient, and secure cross-border data flow mechanism. On talent, it promotes reform across education, science, and talent systems, university-industry joint training, and high-quality vocational education.

What This Means for Foreign Founders

The document is a strategic framework rather than a set of ready-made incentives. Foreign founders should read it as a map of likely policy attention: R&D incentives, technology commercialization channels, digital and green transition, AI applications, and cross-border data arrangements. Company registration and operations in these areas may see evolving implementation rules. Founders should verify specific requirements with local authorities and professional advisors before making investment or structuring decisions.

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

Call to action: Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.