Published by ChinaMNC · Nankang
China’s New Push to Integrate Tech and Industry: What Foreign Founders Need to Know
A practical guide for foreign entrepreneurs on China’s latest policy to deepen the integration of technological and industrial innovation, outlining key measures and 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 registering or operating a company in China, this signals a more coordinated approach to innovation that could affect how businesses access government support, collaborate with research institutions, and commercialize new technologies.
Based on an official government document, the policy sets out a comprehensive framework to align science and technology with industrial development. Below is a summary of the key measures and what they may mean for foreign-invested enterprises.
Overarching Goals and Principles
The policy is guided by the goal of developing “new quality productive forces” and building a modern industrial system. It emphasizes an innovation system led by enterprises and coordinated among various actors, including universities, research institutes, and financial institutions. The aim is to create a new pattern where technological and industrial innovation reinforce each other.
Key principles include:
- Systematic planning and integrated advancement;
- Balancing scientific supply with demand pull, deploying innovation chains around industrial chains and vice versa;
- Strengthening the principal role of enterprises in innovation and improving market mechanisms;
- Reform-driven removal of ideological and institutional barriers.
Key Measures Relevant to Foreign Founders
1. Enterprise-Led Innovation and Project Organization
The policy calls for making national science and technology projects more industry-oriented. It encourages regular collection of enterprise needs and increasing the number of experts from enterprises and venture capital in project guidance, review, and acceptance. Enterprises are encouraged to lead projects, with mechanisms such as “open competition” and “owner responsibility” systems, milestone management, and phased funding. Application assessment will focus on both technical and industrialization targets.
For foreign founders, this suggests opportunities to participate in government-funded projects, especially if your company has clear industrial application goals.
2. Improving Technology Transfer and Commercialization
The policy aims to streamline the conversion of research results into market applications. For national science and technology projects with clear industrial application goals, enterprises should generally lead implementation and commercialization. Universities and research institutes are encouraged to set up technology transfer offices and use mechanisms such as technology licensing, equity investment, and post-payment licensing for SMEs. A national integrated technology market will be developed, along with professional technology transfer institutions and technology managers.
Foreign companies can benefit by collaborating with Chinese universities or research institutes to access technology through licensing or joint development.
3. Scene-Driven Innovation
Demonstration actions will be taken to apply new technologies and products in new scenarios. Local governments are supported to open up application scenarios in government services, smart cities, rural construction, and other areas. Information on technology and scenario supply and demand will be collected and published.
Foreign founders may find opportunities to pilot their technologies in these open scenarios, especially in smart city or rural development projects.
4. Key Technology Breakthroughs and Industrial Upgrading
The policy prioritizes breakthroughs in core technologies in fields such as integrated circuits, industrial machine tools, high-end instruments, advanced materials, and biomanufacturing. It also promotes the development of strategic emerging industries like new energy, new materials, and aerospace, as well as future industries including quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G. Traditional industries will be upgraded through advanced technologies, including the “AI+” initiative.
Foreign companies in these sectors may find enhanced support for R&D and industrialization, but also increased competition.
5. Strengthening Enterprise Innovation Capacity
The policy encourages enterprises to participate in national science and technology strategy and policy-making. It opens national natural science funds to private enterprises on a pilot basis, expands joint funds, and encourages state-owned enterprises to establish R&D reserve funds with independent accounting and tolerance for failure. Tax incentives such as increased R&D expense deduction are mentioned. Support is also given to enterprises building innovation platforms and accessing national major scientific facilities.
Foreign-invested enterprises may be able to access some of these programs, particularly if they are recognized as high-tech or technology-based SMEs.
6. Cultivating Technology Enterprises
The policy aims to optimize the cultivation of leading technology enterprises, support high-tech enterprises, and improve mechanisms for technology-based SMEs, “little giant” enterprises, and manufacturing single champions. It encourages large enterprises to open their R&D platforms, application scenarios, and supply chains to SMEs, and to pilot innovative products from SMEs.
Foreign founders should note the emphasis on SME support and supply chain integration, which could create partnership opportunities with large Chinese companies.
7. 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 strengthen cooperation with enterprises, identifying scientific problems from industrial needs. Enterprises are encouraged to participate in university research and talent training, and to jointly build R&D institutions and projects.
Foreign companies can explore joint R&D with Chinese universities and research institutes, potentially accessing talent and facilities.
8. Financial Support and Talent Development
The policy calls for a science and technology finance system that meets 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 assessment and exit mechanisms. The “innovation points system” will be promoted to quantitatively evaluate SME innovation. A “science and technology board” in the bond market will be built, and a science and technology insurance policy system established.
Talent development will be strengthened through joint university-enterprise programs, dual-mentor systems, and policies allowing researchers to take leaves to start businesses. Enterprises are encouraged to hire industrial mentors and professors.
Foreign founders may benefit from improved access to venture capital and talent programs, especially if they are in hard-tech sectors.
9. Innovation Platforms and Market Environment
The policy plans to build a range of national innovation centers, concept validation centers, and pilot testing platforms to provide services for industrialization. It also aims to remove unreasonable barriers to market entry for innovative products, pilot relaxed market access in new business forms, and explore “sandbox regulation.” Legislation in frontier areas like AI and biotechnology will be improved.
Intellectual property protection will be strengthened, including trade secrets and new business forms. The patent open licensing system will be fully implemented. Standard-setting will be enhanced, including national and international standards in frontier fields.
Foreign companies should pay attention to IP protection improvements and standard-setting activities, which can affect market access.
10. Incentives and Local Pilot Programs
Tax incentives for innovation will be implemented, and尽职免责 mechanisms for technology transfer and venture capital will be improved. State-owned enterprise assessment will be adjusted to encourage joint R&D with universities. Local governments are encouraged to pilot deep integration reforms, with national high-tech zones and innovation demonstration zones taking the lead.
Foreign founders operating in these zones may benefit from pilot policies.
Conclusion
This policy represents a significant effort to align China’s innovation system with industrial needs. For foreign founders, it offers potential opportunities in R&D collaboration, access to government support programs, and participation in emerging industries. However, navigating these programs requires understanding local regulations and building partnerships. 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.