Published by ChinaMNC · Kunshan
China’s New Push to Integrate Tech and Industry: What Foreign Founders Need to Know
A guide for foreign founders on China’s latest policy to deepen the integration of technological and industrial innovation, highlighting practical implications for company registration and operations.
China’s New Push to Integrate Tech and Industry: What Foreign Founders Need to Know
The Chinese government has issued a new policy aimed at deepening the integration of technological innovation and industrial innovation. For foreign founders considering registering or operating a company in China, this policy signals evolving opportunities and regulatory priorities that could affect your business strategy. Below is a summary of the key points, framed for practical understanding.
Overall Direction
The policy sets a goal of developing “new quality productive forces” and building a modern industrial system. It emphasizes an innovation system driven by enterprises and coordinated among various actors—industry, academia, and research—to create a new pattern where technological and industrial innovation reinforce each other. The ultimate aim is to strengthen the chain from technological prowess to industrial and economic strength.
Guiding principles include: accurately grasping new trends in technological and industrial revolutions; coordinating technology supply with demand pull; strengthening enterprises’ role as innovation subjects; and removing institutional barriers through reform.
Key Measures Relevant to Foreign Founders
1. Enterprise Participation in National Projects
The policy seeks to make national science and technology projects more industry-oriented. It calls for regularly collecting enterprise needs and increasing the number of experts from enterprises and venture capital institutions in guideline drafting, project review, and acceptance. Enterprises are encouraged to lead projects, with mechanisms like “open competition” and “milestone” management. This suggests that foreign-invested enterprises may find more avenues to participate in publicly funded R&D projects, provided they meet eligibility criteria.
2. Technology Transfer and Commercialization
Efforts will be made to smooth the path from research to application. For national projects with clear industrial goals, enterprises are expected to lead implementation and commercialization. Universities and research institutes are encouraged to set up technology transfer offices and to license results to small and medium-sized enterprises on a “use first, pay later” basis. A unified national technology market will be developed, with professional technology transfer institutions and technology managers. Foreign founders can leverage these mechanisms to access technologies or commercialize their own innovations.
3. Scene-Driven Innovation
The policy promotes demonstration actions for new technologies, products, and scenarios. Local governments are supported to open application scenarios in government services, smart cities, and rural construction. This could benefit foreign companies with solutions in these areas, as more opportunities for pilot projects and testbeds may emerge.
4. Strengthening Key Technologies and Emerging Industries
Priority is given to achieving breakthroughs in core technologies in fields such as integrated circuits, industrial mother machines, high-end instruments, advanced materials, and biomanufacturing. The policy also aims to foster emerging and future industries, including new energy, new materials, aerospace, low-altitude economy, quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G. Foreign founders in these sectors may find a supportive ecosystem, but should also be aware of heightened competition and regulatory scrutiny.
5. Upgrading Traditional Industries
Traditional industries will be transformed with advanced technologies, including industrial internet, smart manufacturing, and green development. The “AI+” initiative aims to empower all sectors with artificial intelligence. Foreign companies offering such technologies could find demand, but should ensure compliance with emerging regulations.
6. Enhancing Enterprise Innovation Capacity
The policy encourages enterprises to participate in national science and technology strategy and policy-making. It opens national science funds to private enterprises on a pilot basis and expands joint funds. State-owned enterprises are encouraged to establish R&D reserve funds with independent accounting, exempt from value-preservation assessments, and with fault tolerance. Tax incentives such as increased R&D expense deduction are mentioned. Support for enterprise-led innovation platforms and opening of national major science infrastructure to enterprises is also highlighted. Foreign-invested enterprises may benefit from these measures if they qualify under relevant rules.
7. Cultivating Technology Enterprises
Mechanisms to nurture leading technology enterprises, high-tech enterprises, specialized and sophisticated “little giants,” and manufacturing champions will be improved. Startups will receive support in incubation and financing. Large enterprises are encouraged to open R&D platforms, application scenarios, and supply chains to SMEs, and to pilot innovative products from SMEs. This creates opportunities for foreign startups to collaborate with larger Chinese firms.
8. Collaborative Innovation Among Entities
Leading technology enterprises are encouraged to act as chain leaders and form innovation consortia. National laboratories, research institutes, and universities are to deepen cooperation with enterprises, identify scientific problems from industrial needs, and conduct forward-looking research. Enterprises are encouraged to participate in university research and talent training, and to jointly build R&D institutions. Foreign companies can seek partnerships with these entities to access talent and research capabilities.
9. Finance and Talent
A science and technology finance system will be built to meet the financing needs of tech enterprises throughout their lifecycle. Government-guided venture capital funds will focus on early-stage, small, long-term, and hard-tech investments, with improved long-term assessment and exit mechanisms. The “innovation points system” will be promoted to quantitatively evaluate SME innovation. A “tech board” in the bond market will be developed, and a tech insurance policy system established. On talent, reforms will allow researchers to hold concurrent posts, start businesses, and participate in industry-academia collaboration. Foreign founders should note that access to these financial and talent policies may depend on company type and registration status.
10. Platforms and Market Environment
Innovation platforms such as national emerging industry innovation centers, industrial technology engineering centers, and manufacturing innovation centers will be coordinated. Concept validation centers and pilot testing platforms will be built. The policy also calls for removing unreasonable barriers to market entry for innovative products, piloting relaxed market access in new business forms, and exploring “sandbox regulation.” Laws and regulations for frontier fields like AI and biotechnology will be improved, along with ethical norms. Intellectual property protection will be strengthened, including trade secrets and new business forms, with patent open licensing and standard development. Foreign founders should pay attention to IP protection and compliance with these evolving rules.
11. Local Pilots and Regional Development
Local governments are encouraged to pilot deep integration according to their endowments. Coordination between central and local governments will be strengthened, and various functional zones will be developed. National high-tech zones and independent innovation demonstration zones will pioneer policies. International and regional science and technology innovation centers will carry out reform pilots. This means foreign founders may find differentiated policies and incentives across regions, and should consider location-specific advantages.
Practical Implications for Foreign Founders
This policy underscores China’s focus on enterprise-led innovation and industrial upgrading. For foreign founders, it may bring more opportunities to participate in national projects, access technology transfer, collaborate with Chinese partners, and benefit from financial and talent policies. However, eligibility often depends on company structure and registration status. Foreign-invested enterprises are subject to specific regulations, and some measures may prioritize domestic entities. It is advisable to consult local authorities and professional advisors to understand how these policies apply to your situation.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.
For assistance with registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.