Published by ChinaMNC · Ganzhou

China’s New Push to Integrate Tech and Industry: What Foreign Founders Need to Know

A practical guide for foreign founders on China’s latest policy to deepen the integration of technological and industrial innovation, highlighting opportunities in emerging sectors, enterprise-led R&D, and market access reforms.

China’s New Push to Integrate Tech and Industry: What Foreign Founders Need to Know

Foreign founders operating or planning to register a company in China should take note of a recent high-level policy document issued by the General Offices of the Communist Party of China Central Committee and the State Council. The policy aims to deepen the integration of technological innovation with industrial innovation, with significant implications for businesses in technology, manufacturing, and emerging sectors. Below is a summary of the key measures and how they may affect foreign-invested enterprises.

Overall Direction

The policy sets a goal of building a modern industrial system and developing “new quality productive forces” by fostering an innovation system where enterprises play a leading role and various actors collaborate. It emphasizes full-chain integration, covering all fields and elements, and aims to create a new pattern where technological and industrial innovation reinforce each other. For foreign founders, this signals a stronger focus on enterprise-driven innovation and market-oriented application of research outcomes.

Key Measures Relevant to Foreign Founders

1. Enterprise-Led Innovation and R&D

• Greater enterprise participation in national projects: The policy calls for increasing the number of experts from enterprises and venture capital institutions in the drafting of guidelines, project review, and acceptance of national science and technology projects. Enterprises are encouraged to lead projects with clear industrial application goals.
• New funding and management models: Mechanisms such as “revealing the list and taking command” and “milestone” management with phased funding will be improved. This could open opportunities for foreign-invested firms to participate in national R&D tasks.
• Enhanced support for enterprise innovation: Measures include expanding the scope of joint funds, encouraging state-owned enterprises to set up R&D reserve funds, and increasing the proportion of R&D expense tax deductions for small and medium-sized tech enterprises. Foreign founders should review their R&D spending to benefit from these incentives.

2. Support for Tech Enterprises and SMEs

• Graded cultivation of tech firms: The policy supports high-tech enterprises, specialized and sophisticated “little giant” enterprises, and manufacturing single-champion firms. It also encourages large enterprises to open R&D platforms, application scenarios, and supply chains to SMEs, and to pilot innovative products from SMEs.
• Open innovation infrastructure: National major science infrastructure, large research instruments, and national science data centers will be further opened to enterprises. Foreign founders can leverage these resources for their R&D activities.
• Talent programs: Various science and technology talent programs will increase support for enterprises, and the construction of enterprise post-doctoral stations will be strengthened.

3. Emerging and Future Industries

The policy identifies several strategic emerging industries and future industries where foreign founders may find new opportunities:

• Strategic emerging industries: New energy, new materials, aerospace, and low-altitude economy (with healthy and orderly development).
• Future industries: Quantum technology, bio-manufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and 6G mobile communications. The policy encourages exploring multiple technology routes, typical application scenarios, and viable business models to accelerate commercialization.

Foreign founders with expertise in these areas should monitor local implementation policies and consider aligning their business plans with these priority sectors.

4. Technology Transfer and Commercialization

• Enterprise-led commercialization: For national science and technology projects with clear industrial application goals, enterprises will generally lead implementation and dominate the commercialization of results.
• Reforms in IP and technology transfer: Universities and research institutes are encouraged to set up technology transfer offices, and reforms will clarify the ownership of job-related scientific and technological achievements. A “use first, pay later” approach for licensing achievements to SMEs is encouraged.
• National technology market: The policy aims to build a unified national technology market and develop professional technology transfer institutions and technology managers.

5. Market Access and Regulatory Reform

• Removing barriers: The policy calls for breaking down unreasonable institutional barriers that restrict innovative products from entering the market. Pilot programs for relaxed market access in new business forms and fields will be explored, including a “commitment-based entry” system.
• Sandbox regulation: For new technologies, regulatory sandboxes will be explored, and laws and regulations in frontier fields such as artificial intelligence and biotechnology will be improved.
• Intellectual property protection: Protection of trade secrets and IP in new business forms will be strengthened, and a patent open licensing system will be fully implemented. Enterprises are encouraged to participate in standard-setting.

6. Financial and Talent Support

• Tech finance: A financial system tailored to the full lifecycle of tech enterprises will be built. Government-guided venture capital funds and state-owned venture capital funds will focus on early-stage, small, long-term, and hard-tech investments. The “innovation points system” will be promoted, and a “tech board” in the bond market will be developed.
• Talent cultivation: Reforms will allow university and research institute personnel to take secondments, part-time roles, or leave to start businesses. Enterprises are encouraged to hire industrial mentors and professors. Support for young tech talent and tech entrepreneurs will be strengthened.

7. Local Pilot Programs and Regional Development

The policy supports local governments in carrying out pilot programs for deep integration. National high-tech zones, self-innovation demonstration zones, and qualified localities will be encouraged to experiment with policies. This means foreign founders should pay attention to local implementation measures, as incentives and pilot programs may vary by region.

Practical Implications for Foreign Founders

While the policy is broad, it signals a more favorable environment for enterprises engaged in technological innovation. Foreign founders should consider the following actions:

• Review R&D incentives: Ensure your company is taking advantage of increased R&D tax deductions and other incentives.
• Explore participation in national projects: Monitor opportunities to join national science and technology projects, especially those with industrial application goals.
• Leverage open innovation resources: Utilize national research infrastructure and data centers that are being opened to enterprises.
• Align with priority sectors: If your business is in emerging or future industries, align your strategy with local policies supporting these areas.
• Engage in technology transfer: Consider licensing technologies from universities or research institutes under the “use first, pay later” model.
• Stay informed on regulatory reforms: Keep abreast of pilot programs for market access and sandbox regulation that could benefit your products.

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

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