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

A practical guide for foreign founders on China's official policy direction for developing "new productive forces" — covering tech innovation, industrial upgrading, AI, green development, finance and talent — and what it means for registering and operating a company in China.

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 productive forces" (新质生产力). For foreign founders building a business in China, this document is a useful signal of where policy attention, funding channels and regulatory reform are heading. It sets out the government's intended direction across science and technology, industrial upgrading, digitalization, green transition, finance and talent. Below is a practical summary of the main points relevant to company registration and operations.

Innovation and Technology: Where Support Is Directed

Basic and disruptive research

The policy calls for major science and technology projects focused on strategic, landmark and leading-edge products. It emphasizes both goal-oriented and free-exploration research, organized basic research and applied basic research, and stronger support for original theoretical work, key generic technologies, frontier technologies, modern engineering technologies and disruptive innovation. It also calls for coordinated construction of science and technology platforms and major infrastructure, with open sharing and avoidance of duplication.

Key core technologies and national strategic capacity

The document refers to using the "new system of mobilizing nationwide resources" to organize high-quality development actions for key manufacturing supply chains and industrial innovation projects, with whole-chain and whole-ecosystem support. It mentions policies for first-of-their-kind and first-batch applications to encourage technology iteration. It also describes roles for national laboratories, national research institutes, high-level research universities and leading technology enterprises, and allows more flexible management systems for research-type public institutions.

Enterprises as the main body of innovation

Several measures are aimed at enterprises: a corporate R&D reserve fund system, a higher super-deduction ratio for enterprise R&D expenses, encouragement for small and medium-sized tech enterprises to increase R&D spending, and a pathway for enterprise R&D projects that meet national strategic needs to be elevated to national projects. Capable private enterprises are encouraged to lead major national technology research tasks. The policy also supports specialized, refined, distinctive and innovative (专精特新) SMEs and calls for improving original innovation arrangements in state-owned enterprises.

Commercializing research results

The text calls for pilot application programs for new technologies, products and scenarios, and for building proof-of-concept and pilot-testing platforms. It proposes whole-process evaluation of science projects, licensing results to SMEs on a "use first, pay later" basis, and opening large enterprises' supply chains to SMEs. Artificial intelligence is named as a driver of changes in research methods.

Industrial Priorities

Upgrading traditional industries

The policy stresses keeping the real economy as the foundation and using national standards, digital and intelligent technologies, and green technologies to upgrade traditional sectors. It lists mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding and construction as sectors whose global position should be consolidated. It also references industrial base re-engineering, major technical equipment, manufacturing technology upgrading, large-scale equipment renewal, tax incentives for technology upgrading investment, and the development of smart, green and service-oriented manufacturing. Agriculture and services also receive attention, including agricultural factories, seed industry revitalization, smart agriculture and modernization of services.

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 policy encourages cluster development tailored to local conditions and cross-regional industrial cooperation, while cautioning against "involution-style" competition. It also calls for orderly development of the low-altitude economy and commercial aerospace under safety conditions. Future industries listed include quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence and sixth-generation mobile communications, supported by investment growth and risk-sharing mechanisms.

Digital economy and AI

The document calls for rules on data ownership, trading, revenue distribution and rights protection, plus pilot programs for data elements. It lists the "East Data, West Computing" project, smart manufacturing, industrial internet and a national integrated computing network. A dedicated section covers the "AI+" initiative: applying AI to traditional industries, intelligent connected vehicles, AI phones and computers, humanoid robots, and other intelligent terminals; advancing algorithms, computing power and data supply; and establishing technology monitoring, risk warning and emergency response systems.

Green development

Green manufacturing, green services and the green energy industry are prioritized. The policy mentions green upgrades in key industries, green consumption incentives, certification and labeling, zero-carbon factories and parks, and circular waste utilization. It also references carbon emission总量 and intensity dual control, carbon statistics and accounting, product carbon labeling and footprint systems, expanding the national carbon market, the voluntary emission reduction market and a unified green certificate market, alongside green finance products, green procurement and green taxation.

Institutional Reform, Finance and Talent

Market and regulatory reform

The policy calls for market access reform, stronger anti-monopoly and anti-unfair competition enforcement, governance in AI and biology, cross-departmental supervision using data, an integrated intellectual property management system with punitive damages, and research on tax rules suited to new business forms.

Finance

It encourages angel investment, venture capital and private equity, a stronger guiding role for government investment funds, and support policies for long-term capital investing early, small, long-term and in hard technology, with an emphasis on "patient capital." It also mentions bank loan products suited to new productive forces, science and technology bonds, listing financing for quality tech enterprises, insurance products covering the innovation chain and technology leasing.

Opening and global talent

On opening up, the text encourages free trade pilot zones to gather advanced production factors, platforms such as jointly built science parks, Belt and Road joint laboratories and international advanced technology application centers, participation in international big science programs, and foreign venture capital institutions and international standards organizations to develop in China. It also calls for efficient, convenient and secure cross-border data flows. On talent, it proposes reform of education, science and technology and talent systems, new research-oriented universities, modern vocational education, and joint customized training between enterprises and universities.

Practical Takeaways

• Technology-intensive sectors — AI, robotics, new energy, biomedicine, aerospace, green technology and future industries — are the clearest focus of policy attention.
• R&D incentives such as super-deductions and enterprise-led national projects may be relevant to structuring your China entity's innovation activity.
• Commercialization support through pilot platforms and public procurement of first products may create opportunities for early-stage products.
• Financial channels include venture capital, government-guided funds, science and technology bonds and listing pathways.
• Opening measures include free trade pilot zones, cross-border data mechanisms and encouragement of foreign investment institutions.

Foreign founders should treat this document as directional policy rather than a set of automatic entitlements. Specific incentives, approvals and tax treatments depend on local implementation and your company's circumstances.

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

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