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China's New Push to Integrate Tech and Industry: What Foreign Founders Need to Know
China's central government has issued a policy to deepen the integration of technological and industrial innovation. For foreign founders, this signals expanded opportunities in key sectors, new support mechanisms for tech firms, and a more coordinated innovation ecosystem. Here's a practical overview.
China's New Push to Integrate Tech and Industry: What Foreign Founders Need to Know
The General Offices of the CPC Central Committee and the State Council have released a policy opinion on advancing the deep integration of technological and industrial innovation. The document outlines a comprehensive framework to strengthen China's innovation system, with a focus on enterprise-led collaboration and full-chain support. For foreign founders operating or planning to register a company in China, this policy provides insight into the sectors and mechanisms that will receive priority support.
Guiding Principles and Strategic Focus
The policy is guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the 20th Party Congress and subsequent plenary sessions. It aims to develop new quality productive forces and build a modern industrial system. The core approach is to establish an innovation system led by enterprises and coordinated among all participants, covering the entire chain and all elements.
Key working principles include:
- Accurately grasping new trends in technological and industrial revolutions, and strengthening systematic planning and integrated advancement.
- Balancing scientific and technological supply with demand traction, deploying innovation chains around industrial chains and vice versa.
- Reinforcing the dominant role of enterprises in innovation, improving market mechanisms that incentivize innovation, and guiding innovation resources to gather in enterprises.
- Stimulating innovation vitality through reform, and resolutely removing ideological and institutional barriers that hinder deep integration.
Key Measures for Enterprises
1. Improving Innovation Coordination
The policy calls for leveraging the advantages of the new nationwide system to strengthen coordination in strategic planning, major tasks, and policy measures for technological and industrial innovation. It emphasizes aligning policies across science and technology, industry, finance, education, and talent. Monitoring and evaluation of deep integration will be conducted for localities and industries, with a focus on how technological innovation leads industrial development.
2. Reforming Task Organization
National science and technology programs will be more oriented toward industrial application. Enterprise demands will be regularly collected, and experts from enterprises and venture capital institutions will be included in guideline drafting, project review, and acceptance. The policy promotes enterprise-led projects and flexible funding methods such as milestone management and phased disbursement. A project acceptance mechanism will assess both technology and market performance.
3. Facilitating Technology Transfer
Enterprises will generally lead the implementation and commercialization of national science and technology projects with clear industrial application goals. Universities and research institutes are encouraged to set up technology transfer offices, strengthen services in intellectual property, incubation, and tech finance, and accelerate application through technology transfer, licensing, or equity investment. Reforms will grant researchers greater ownership of job-related科技成果 and allow universities to license results to small and medium-sized enterprises on a pay-after-use basis. A unified national technology market will be developed, along with professional technology transfer institutions and technology managers.
4. Scenario-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, and to improve the publication of supply and demand information for technologies and scenarios.
5. Breakthroughs in Core Technologies
Efforts will target decisive breakthroughs in key core technologies in integrated circuits, industrial mother machines, high-end instruments, advanced materials, and biomanufacturing. Industrial base reconstruction and major technical equipment projects will be deepened, focusing on weak links, basic components, key basic software, materials, and advanced processes.
6. Cultivating Emerging and Future Industries
The policy supports basic research and disruptive technology identification. Industrial innovation projects will integrate facility construction, technology R&D, and product iteration. Strategic emerging industries such as new energy, new materials, and aerospace will be accelerated, with clusters built according to local conditions. The low-altitude economy will be promoted. In frontier fields like quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G, diverse technological routes and viable business models will be explored to commercialize frontier technologies and foster future industries.
7. Upgrading Traditional Industries
Major technological transformation and large-scale equipment renewal projects will be implemented. Industrial internet innovation will be accelerated, and the integration of the digital and real economies promoted. Smart, green, and integrated manufacturing will be advanced. Agricultural science and technology breakthroughs in seed industry and machinery will be strengthened. A full-chain technology service system will be built, and the "AI+" action will be fully implemented to empower all sectors with artificial intelligence.
8. Enhancing Enterprise Innovation Capacity
Mechanisms will be improved for enterprises to regularly participate in national science and technology and industrial development strategies, plans, and policies. The National Natural Science Foundation will pilot opening to private enterprises, and enterprise innovation joint funds will be expanded. State-owned enterprises are encouraged to establish R&D reserve funds with independent accounting, exempt from value-preservation assessments, and with fault tolerance. Technology-based SMEs will be encouraged to increase R&D investment, and the super deduction ratio for R&D expenses will be raised. Enterprises are supported to lead the construction of science and technology innovation platforms. National major science and technology infrastructure, large research instruments, and national science data centers will be opened to enterprises. Talent programs will support enterprises more, and enterprise post-doctoral stations will be strengthened.
9. Cultivating Technology Enterprises
The policy optimizes mechanisms for cultivating leading technology enterprises, supports high-tech enterprises, and improves nurturing mechanisms for technology-based SMEs, specialized and sophisticated "little giant" enterprises, and manufacturing single-champion enterprises. It accelerates the cultivation of technology startups and improves incubation and investment services. Large enterprises are guided to open R&D platforms, application scenarios, and supply chains to SMEs, and to pilot first-use of SME innovative products.
10. Strengthening Collaboration Among Innovation Actors
Leading technology enterprises are supported to play a chain-leader role and lead innovation consortia. National laboratories, research institutes, and high-level research universities will strengthen cooperation with leading enterprises, distilling scientific questions from industrial needs. Enterprises are encouraged to participate in university and research institute activities and talent training, and to jointly build R&D institutions and projects.
11. Promoting Virtuous Cycle of Technology, Industry, and Finance
A tech finance system will be built to meet the financing needs of tech enterprises throughout their life cycle. The national venture capital guidance fund will play a role. Government-funded and state-owned venture capital funds will focus on early-stage, small, long-term, and hard-tech investments, with long-cycle assessment, differentiated regulation, and exit mechanisms. The "innovation points system" will be promoted to quantitatively assess SME innovation capacity. A "tech board" in the bond market will be built with high quality. A tech insurance policy system will be established.
12. Talent Cultivation and Use
Education will be coordinated around technological innovation, industrial development, and national strategic needs. Discipline adjustment mechanisms involving science, technology, and industry departments will be improved. University-enterprise joint programs, work-study alternation, and "dual mentor" systems will be promoted. Policies for researchers to take temporary posts, part-time jobs, and leave to start businesses will be improved, and models like science and technology special commissioners will be promoted. Universities and research institutes are supported to hire enterprise innovators as industry mentors and professors. Young scientists and technologists are supported in innovation and entrepreneurship, and technology entrepreneurs will be vigorously cultivated.
13. Building Integrated Innovation Platforms
National emerging industry innovation centers, national industrial technology engineering centers, national technology innovation centers, and national manufacturing innovation centers will be laid out coordinately to strengthen key common technology supply. Concept verification centers and pilot testing platforms will be built to serve industrialization. Transformed research institutes are supported to build industrial technology research institutes. Local governments are supported to develop new R&D institutions in a standardized manner.
14. Improving the Market Environment for Innovation
Unreasonable institutional barriers to market entry for innovative products will be removed. Pilot programs for relaxed market access in new business forms and fields will be carried out, exploring a commitment-based entry system. Regulation of new technology applications will be strengthened, and "sandbox regulation" will be explored. Laws and regulations in frontier fields such as AI and biotechnology will be improved, along with scientific ethics rules.
15. Intellectual Property Protection and Standards
Protection of trade secrets and IP in new business forms will be strengthened, with benefit-sharing and risk-sharing mechanisms in industry-university-research cooperation and technology transfer. The patent open licensing system will be fully implemented. Patent layout for major national science and technology projects will be strengthened. Standard layout will be coordinated with research tasks and assessment. National and international standards in frontier fields will be developed, and enterprise and group standards will be improved.
16. Incentives and Evaluation Policies
The policy improves the full-chain policy system for innovation activities, implementing tax incentives for scientific and technological innovation. Fault-tolerant and exemption mechanisms for technology transfer and venture capital will be improved, with negative lists explored. The classified assessment system for state-owned enterprises will be improved, increasing the proportion of joint R&D expenses with universities and research institutes treated as profit add-back. Industry-university-research cooperation and technology transfer results will be important in evaluating high-level research universities, institutes, and researchers.
17. Local Pilot Programs
Macro guidance for local science and technology and industrial layouts will be strengthened, guiding localities to build on their advantages. Central-local coordination will be enhanced, with mechanisms for shared investment and joint implementation of major tasks. The regional innovation system will be improved, and cross-regional collaborative innovation strengthened. Various science and technology innovation and industrial innovation functional zones will be developed coordinately, and national high-tech industrial development zones and national independent innovation demonstration zones will pilot policies. International and regional science and technology innovation centers and qualified localities will carry out pilot reforms for deep integration, implement actions to stimulate industrial innovation vitality, build vibrant innovative cities, and create sources of original innovation.
What This Means for Foreign Founders
For foreign founders, this policy signals China's continued commitment to creating an enterprise-friendly innovation environment. Key takeaways include:
- Opportunities in priority sectors: Integrated circuits, industrial mother machines, high-end instruments, advanced materials, biomanufacturing, new energy, new materials, aerospace, low-altitude economy, quantum technology, hydrogen, brain-computer interfaces, embodied intelligence, and 6G are highlighted. Foreign founders with expertise in these areas may find supportive policies and funding opportunities.
- Enterprise-led innovation: The policy emphasizes enterprises as the main body of innovation, with measures to increase enterprise participation in national projects and open national research facilities to enterprises. Foreign-invested enterprises may benefit from these openings, subject to applicable regulations.
- Tech finance and talent support: Improved access to venture capital, bond markets, and insurance, along with talent programs, could ease financing and hiring challenges for foreign-founded tech companies.
- Local pilot programs: High-tech zones and innovation demonstration zones will pilot new policies, offering testing grounds for foreign founders to explore new business models.
Foreign founders should monitor local implementation details and consider engaging with local authorities and industry associations to leverage these measures. When registering a company in China, choosing a location within a high-tech zone or innovation cluster may provide additional advantages.
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.