Published by ChinaMNC · Lingbi

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

A practical guide for foreign founders on China’s latest policy to deepen the integration of technological and industrial innovation, covering enterprise-led R&D, financing, talent, and market access.

Overview

China’s central authorities have issued a new opinion aimed at deeply integrating technological innovation with industrial innovation. The policy sets out a framework to build an innovation system led by enterprises and coordinated among various actors, with the goal of developing new quality productive forces and a modern industrial system. For foreign founders registering or operating a company in China, this signals a more structured approach to how innovation resources, funding, and market opportunities are organized.

Policy Direction and Guiding Principles

The opinion emphasizes systematic planning, aligning scientific and technological supply with demand, and strengthening the principal role of enterprises in innovation. It calls for removing institutional barriers that hinder deep integration and for using reform to stimulate innovation vitality. The overarching aim is to create a new pattern where technological and industrial innovation reinforce each other, supporting high-level self-reliance and high-quality development.

Key Measures Relevant to Foreign Founders

1. Enterprise-Led Innovation and Project Organization

National science and technology programs will give greater weight to industrial application. Enterprises’ needs will be regularly collected, and experts from enterprises and venture capital institutions will be included in guideline drafting, project review, and acceptance. The policy supports enterprise-led projects, the “open competition” mechanism, milestone management, and phased funding. A project acceptance mechanism will assess both technology application and market performance, integrating R&D and industrialization goals. Foreign founders with innovative projects may find more opportunities to participate in national programs or collaborate with Chinese partners.

2. Technology Transfer and Commercialization

The policy aims to smooth the path from research to application. For national science and technology projects with clear industrial application goals, enterprises will generally lead implementation and commercialization. Universities and research institutes are encouraged to set up technology transfer offices or positions, strengthen services in intellectual property, incubation, and technology finance, and accelerate application through technology transfer, licensing, or equity investment. Reforms will grant researchers more rights over job-related科技成果 and allow “use first, pay later” licensing to small and medium-sized enterprises. A national integrated technology market and professional technology transfer institutions will be developed. Foreign founders can explore licensing or collaboration with Chinese research institutions, but should ensure proper IP agreements.

3. Scene-Driven Innovation and Market Access

The policy promotes demonstration actions for new technologies, products, and scenarios, encouraging local governments to open application scenarios in government services, smart cities, and rural construction. It also calls for pilot programs to relax market access in new business forms and fields, including “commitment-based entry” and “sandbox regulation.” For foreign founders with new technologies, these pilots could offer testing grounds, but regulatory compliance remains essential.

4. Key Technology Breakthroughs and Industrial Upgrading

Efforts will focus on decisive breakthroughs in integrated circuits, industrial mother machines, high-end instruments, advanced materials, and biomanufacturing. The policy supports industrial base reconstruction, major equipment tackling, and breakthroughs in basic components, software, materials, and processes. It also aims to cultivate 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. Traditional industries will be upgraded through intelligent, green, and integrated manufacturing, including the “AI+” initiative. Foreign founders in these sectors may find incentives and collaborative opportunities.

5. Strengthening Enterprise Innovation Capacity

Enterprises will have more channels to participate in national science and technology strategies 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 separate accounting and fault tolerance. Small and medium-sized tech enterprises are encouraged to increase R&D investment, with higher super-deduction ratios for R&D expenses. Enterprises are supported to build innovation platforms, and national major science facilities and data centers will open to enterprises. Various talent programs will support enterprise talent, and postdoctoral workstations will be strengthened. Foreign founders should note that these measures may apply to their China-registered entities if they qualify as tech enterprises.

6. Cultivating Tech Enterprises and Collaborative Innovation

The policy aims to optimize the cultivation of leading tech enterprises, support high-tech enterprises, and improve mechanisms for tech SMEs, “little giant” enterprises, and manufacturing single champions. It encourages large enterprises to open R&D platforms, application scenarios, and supply chains to SMEs, and to pilot first-use of SME innovation products. Leading enterprises are encouraged to form innovation consortia. Foreign founders may benefit from supply chain openings and collaboration with larger firms.

7. Tech Finance and Talent

A tech finance system will be built to meet the full life-cycle financing needs of tech enterprises. The national venture capital guidance fund will play a role, and government-guided and state-owned venture capital funds will focus on early-stage, small, long-term, and hard-tech investments, with long-term assessment and differentiated regulation. The “innovation points system” will be promoted for quantitative evaluation of SME innovation. A high-quality “tech board” in the bond market will be built, and a tech insurance policy system established. In talent, universities and enterprises will collaborate on education, with adjusted discipline settings, joint training, and “dual mentor” systems. Policies will support researchers’ part-time work and entrepreneurship, and enterprises can hire innovation talent as industry professors. Foreign founders should consider how these financing and talent measures can support their China operations.

8. Innovation Platforms and Market Environment

The policy calls for building integrated innovation platforms, including national emerging industry innovation centers, industrial technology engineering centers, technology innovation centers, and manufacturing innovation centers. Concept verification centers and pilot testing platforms will be built. Local new R&D institutions will be supported. The market environment will be improved by removing unreasonable barriers to innovative products, piloting relaxed market access, and using sandbox regulation. Laws and regulations for AI and biotechnology will be improved, and science ethics rules strengthened. Intellectual property protection will be enhanced, including trade secrets and new business forms, with benefit-sharing and risk-sharing mechanisms. The patent open licensing system will be fully implemented, and standard research will be strengthened. Foreign founders should pay attention to IP protection and standard-setting participation.

9. Incentives and Local Pilot Programs

The policy improves incentive and evaluation policies, implementing tax incentives for innovation and establishing fault-tolerance mechanisms for technology transfer and venture capital. State-owned enterprise assessment will be refined, and joint R&D expenses with universities and research institutes will be treated more favorably. Local governments are encouraged to pilot deep integration, leveraging their strengths, and national high-tech zones and independent innovation demonstration zones will conduct policy pilots. International and regional science and technology innovation centers will carry out reform pilots. Foreign founders may find local pilot zones offering favorable conditions for innovation-driven activities.

Practical Takeaways for Foreign Founders

• Engage with enterprise-led programs: Look for opportunities to participate in national or local science and technology projects, especially if your company has proprietary technology.
• Leverage technology transfer: Explore licensing or collaboration with Chinese universities and research institutes, using “use first, pay later” arrangements where available.
• Access financing: Investigate government-guided venture funds, tech finance instruments, and innovation points systems that may support your China entity.
• Use pilot zones: Consider locating in high-tech zones or pilot regions that offer relaxed market access and sandbox regulation for new technologies.
• Protect IP: Ensure robust IP agreements in collaborations and utilize the patent open licensing system and trade secret protections.
• Monitor sector-specific opportunities: Sectors like AI, biotech, new energy, and advanced manufacturing are highlighted for support.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.