Published by ChinaMNC ยท Lingbi
China's New Innovation Integration Policy: What Foreign Founders Need to Know
A practical guide for foreign founders on China's policy to deepen the integration of technological and industrial innovation, covering key measures relevant to company registration and operations.
China's Push to Integrate Technology and Industry: Implications for Foreign Founders
China's central government has issued a new policy to deepen 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 market access, partnerships, and funding opportunities. Below is a summary of the key measures outlined in the policy, focusing on what matters for foreign businesses.
1. Strengthened Coordination and Planning
The policy emphasizes a unified approach to planning science, technology, and industrial development. It calls for aligning policies across technology, industry, finance, education, and talent. For foreign founders, this means greater policy coherence, which can simplify compliance but also require closer attention to cross-sector regulations. The government will monitor and evaluate the integration of innovation and industry, using technological leadership and industrial innovation levels as key metrics. Foreign companies may be included in these assessments, so maintaining strong innovation credentials could be beneficial.
2. Reforms in Research Project Organization
National science and technology programs will become more industry-oriented. Companies' needs will be regularly collected, and experts from enterprises and venture capital will participate in guideline drafting, project review, and acceptance. This opens opportunities for foreign-invested enterprises to contribute to national projects, especially if they have cutting-edge technology. The policy also promotes models like "open competition" and "milestone" management, which could make funding more accessible to innovative foreign firms.
3. Smoother Technology Transfer
Measures to improve technology transfer include allowing enterprises to lead projects with clear industrial goals and take the lead in commercialization. Universities and research institutes are encouraged to set up technology transfer offices, and reforms will grant researchers more rights over their inventions. The policy also promotes a national integrated technology market and the use of technologies by small and medium-sized enterprises (SMEs) on a "use first, pay later" basis. Foreign founders can leverage these mechanisms to access technologies or commercialize their own innovations.
4. Scenario-Driven Innovation
The government will implement demonstration actions for new technologies, products, and scenarios, encouraging local governments to open application scenarios in government services, smart cities, and rural construction. This could provide foreign companies with opportunities to pilot their solutions in real-world settings, especially in smart city and digital government projects.
5. Breakthroughs in Key Technologies
Focus areas include integrated circuits, industrial mother machines, high-end instruments, advanced materials, and biomanufacturing. The policy aims for decisive breakthroughs in core technologies and strengthens industrial foundations. Foreign founders in these sectors may find increased support for R&D and collaboration with Chinese partners.
6. Cultivating Emerging and Future Industries
The policy promotes original and disruptive innovation to foster strategic emerging industries such as new energy, new materials, and aerospace, as well as future industries like quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G. It encourages exploration of diverse technological routes and business models. Foreign startups in these fields could benefit from a supportive ecosystem and potential government backing.
7. Upgrading Traditional Industries
Traditional sectors will be transformed through advanced technologies, including industrial internet, digital-real economy integration, and smart, green manufacturing. The "AI+" initiative will apply artificial intelligence across industries. Foreign companies offering relevant technologies may find demand from Chinese manufacturers seeking upgrades.
8. Enhancing Enterprise Innovation Capacity
Enterprises will have more opportunities to participate in national science and technology strategy and policy-making. The National Natural Science Foundation will pilot opening to private enterprises, and joint funds with enterprises will expand. State-owned enterprises are encouraged to establish R&D reserve funds with independent accounting and exemption from value-preservation assessments. Tax incentives like increased R&D expense deductions for tech SMEs are highlighted. Foreign-invested enterprises can also benefit from these incentives and from greater access to national research facilities and talent programs.
9. Nurturing Technology Enterprises
The policy supports high-tech enterprises, specialized and sophisticated SMEs, and manufacturing champions. It encourages large enterprises to open R&D platforms, application scenarios, and supply chains to SMEs and to test their innovative products first. Foreign founders setting up SMEs in China can tap into these collaboration opportunities.
10. Collaborative Innovation Among Entities
Leading tech enterprises are encouraged to form innovation consortia, and national labs, research institutes, and universities will deepen cooperation with enterprises. Foreign companies can join such consortia or partner with Chinese institutions for R&D and talent development.
11. Virtuous Cycle of Technology, Industry, and Finance
A technology finance system will be built to meet financing needs across the lifecycle of tech enterprises. The national venture capital guidance fund will play a role, and government-backed venture funds will focus on early-stage, small, long-term, and hard-tech investments. The "innovation points system" will quantitatively assess SME innovation, and a "tech board" in the bond market will be developed. Foreign founders can explore these financing channels.
12. Talent Development and Use
Education will be aligned with innovation and industry needs, with reforms in curriculum and joint university-enterprise programs. Policies will support researchers in taking temporary positions or starting businesses, and enterprises can hire university talents as industry professors. Young tech talents and entrepreneurial scientists are prioritized. Foreign founders can hire from this talent pool and participate in joint training.
13. Building Innovation Platforms
National new industry innovation centers, industrial technology engineering centers, and manufacturing innovation centers will be established. Concept validation and pilot testing platforms will serve new technology commercialization. Local new R&D institutions are encouraged. Foreign companies can access these platforms for testing and validation.
14. Improving the Market Environment
Market access restrictions on innovative products will be removed, with pilot programs for relaxed access and "commitment-based entry" in new business forms. Sandbox regulation will be explored for new technologies. Laws and ethics for AI and biotechnology will be improved. Foreign founders should monitor these regulatory developments.
15. Intellectual Property and Standards
IP protection will be strengthened, including trade secrets and new business forms. Patent open licensing will be fully implemented. Standards development for national and international standards in frontier fields will be enhanced. Foreign companies should engage in standard-setting to protect their technologies.
16. Incentives and Evaluation
Tax incentives for innovation will be implemented. Due diligence exemption mechanisms for tech transfer and venture capital will be improved. State-owned enterprise evaluation will be reformed, and joint R&D expenses with universities will be treated favorably. Foreign founders can benefit from a more predictable incentive environment.
17. Local Pilot Programs
Local governments are encouraged to pilot deep integration reforms based on their strengths. National high-tech zones and innovation demonstration zones will pioneer policies. International and regional science and technology innovation centers will test integration models. Foreign founders might find local incentives and pilot programs in these areas.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.
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.