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

China has issued a policy to deepen the integration of technological and industrial innovation. For foreign founders operating or registering a company in China, this signals expanded opportunities in key sectors, new support for enterprise-led innovation, and a more open environment for tech startups. Here is a practical overview of the measures that matter.

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

China’s central government has issued a new policy aimed at deepening the integration of technological and industrial innovation. The directive, jointly released by the General Offices of the Communist Party of China Central Committee and the State Council, sets out a framework to strengthen enterprise-led innovation, accelerate the application of scientific breakthroughs, and build a modern industrial system. For foreign founders registering or operating a company in China, the policy signals both opportunities and a clearer regulatory direction in several high-tech and strategic sectors.

Enterprise Innovation at the Core

The policy repeatedly emphasizes the role of enterprises as the primary drivers of innovation. It calls for improving mechanisms that allow companies to participate in national science and technology planning and policy-making. Specific measures include:

• Opening national natural science foundation pilot programs to private enterprises.
• Expanding the scope and scale of enterprise innovation joint funds.
• Encouraging state-owned enterprises to establish R&D reserve funds with independent accounting, exemption from value-preservation assessments, and error-tolerance mechanisms.
• Raising the proportion of R&D expenses that can be deducted for tax purposes for small and medium-sized tech enterprises.
• Supporting enterprises in building science and technology innovation platforms and bases.
• Improving access for enterprises to national major science infrastructure, large research instruments, and national science data centers.

For foreign founders, these measures suggest that companies with strong R&D capabilities may find greater access to public research resources and funding programs, particularly if they are structured as high-tech or small and medium-sized tech enterprises.

Support for Tech Startups and SMEs

The policy outlines a multi-tiered approach to nurturing technology companies. It calls for optimizing the cultivation of leading tech enterprises, supporting high-tech enterprises, and improving mechanisms to foster small and medium-sized tech enterprises, specialized and sophisticated “little giant” enterprises, and manufacturing single-champion enterprises. It also emphasizes accelerating the cultivation of tech startups by improving incubation, investment, and financing services.

Collaboration between large and small enterprises is encouraged: large companies are guided to open their R&D platforms, application scenarios, and supply chains to smaller firms, and to adopt innovative products from SMEs on a trial basis. This could create partnership opportunities for foreign-invested startups that offer innovative solutions.

Priority Sectors and Frontier Fields

The policy identifies several key areas for concentrated efforts:

• Critical core technologies: integrated circuits, industrial machine tools, high-end instruments, advanced materials, and biomanufacturing.
• Strategic emerging industries: new energy, new materials, aerospace, and low-altitude economy.
• Future industries: quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications.

In these frontier fields, the policy encourages exploration of diverse technical routes, typical application scenarios, and viable business models to accelerate the industrialization and commercialization of advanced technologies. Foreign founders with expertise in these areas may find a supportive ecosystem for pilot projects and commercialization.

Technology Transfer and Commercialization

To bridge the gap between research and market application, the policy proposes several mechanisms:

• For national science projects with clear industrial application goals, enterprises should lead implementation and commercialization.
• Universities and research institutes are supported to set up technology transfer offices and to license科技成果 to SMEs on a “use first, pay later” basis.
• Reforms to grant researchers ownership of job-related科技成果 and to manage such assets separately.
• Development of a national integrated technology market and a professional technology transfer workforce.

These measures could make it easier for foreign companies to access Chinese research outputs through licensing or collaboration.

Scenario-Driven Innovation

The policy promotes the opening of application scenarios, particularly in government services, smart cities, and rural development. It calls for better collection and publication of supply and demand information related to technologies and scenarios. For foreign founders, this may translate into opportunities to pilot technologies in real-world settings, especially in smart city and digital government projects.

Financial and Talent Support

A sound science and technology finance system is envisioned, including:

• Government-guided venture capital funds that invest early, in small companies, for the long term, and in hard tech.
• Promotion of an “innovation points system” to quantitatively assess the innovation capacity of small and medium-sized tech enterprises.
• Development of a “tech board” in the bond market.
• A science and technology insurance policy system.

On talent, the policy encourages collaborative education, industry mentors, and flexible policies for researchers to start businesses. Foreign founders may benefit from a more open talent environment, including the ability to hire researchers from universities and institutes.

Platforms and Collaborative Innovation

The policy calls for building integrated innovation platforms such as national emerging industry innovation centers, national industrial technology engineering centers, national technology innovation centers, and national manufacturing innovation centers. It also supports proof-of-concept centers and pilot testing platforms. These platforms could serve as partners or service providers for foreign-invested companies seeking to test and scale technologies.

Market Environment and IP Protection

To foster a supportive market environment, the policy proposes:

• Removing unreasonable barriers to market entry for innovative products, including pilot programs for relaxed market access and “commitment-based entry” in new business forms.
• Exploring “sandbox regulation” for new technologies.
• Improving laws and regulations in frontier fields such as artificial intelligence and biotechnology.
• Strengthening intellectual property protection, including trade secrets and new business forms.
• Fully implementing the patent open licensing system.
• Enhancing standard-setting in frontier fields, including national and international standards.

These measures suggest a more predictable environment for IP protection and market access, which are key concerns for foreign founders.

Local Pilot Programs

The policy encourages local governments to pilot deep integration reforms. National high-tech zones, national independent innovation demonstration zones, and qualified localities are encouraged to carry out trials. International science and technology innovation centers and regional centers are also mentioned. For foreign founders, this means that certain regions may offer more favorable policies and faster approval processes for innovative activities.

What This Means for Foreign Founders

While the policy is a high-level directive, it sets the tone for implementation by ministries and local governments. Foreign founders should monitor follow-up regulations and local pilot programs. Key takeaways include:

• Greater emphasis on enterprise-led innovation may open doors for foreign-invested companies to participate in national projects.
• Support for tech startups and SMEs could include tax incentives and access to funding.
• Priority sectors such as integrated circuits, biomanufacturing, and new energy may see more policy support.
• Technology transfer reforms could facilitate collaboration with Chinese universities and research institutes.
• Improved IP protection and market access measures are positive for foreign innovators.

As always, foreign founders should seek professional advice to understand how these policies apply to their specific situation.

Call to Action: 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.