Published by ChinaMNC · Yongfu

China's New Growth Model: What the New Quality Productive Forces Policy Means for Foreign Founders

A practical briefing for foreign founders on China's official policy direction for developing new quality productive forces, covering innovation, industrial upgrading, the AI+ initiative, green transition, finance and market access.

Why This Policy Matters to Foreign Founders

The Central Committee of the Communist Party of China and the State Council have issued an opinion on developing new quality productive forces — a policy framework that shapes how China intends to upgrade its economy around technology, industrial modernisation and higher productivity. For foreign founders registering or running a company in China, the document signals where incentives, regulatory attention and market opportunities are likely to concentrate. Below is a practical reading of the source, focused on what it says rather than on predictions.

Core Direction of the Policy

The opinion sets out guiding principles: innovation as the leading force, reform as the key, measures adapted to local conditions, and sequencing that builds new capacity before dismantling old arrangements. It stresses high technology, high efficiency and high quality, and calls for balancing government and market, development and security, and self-reliance with openness. The stated marker of success is a substantial rise in total factor productivity, achieved through technological breakthroughs, better allocation of production factors, and deep industrial upgrading.

The document also emphasises creating production relations better suited to new quality productive forces and a development ecosystem that supports deep integration of technological and industrial innovation.

Innovation and Enterprise Roles

Science and key technologies

The policy calls for original and disruptive innovation, major science projects oriented to strategic products, and a mix of mission-driven and free-exploration research. It proposes coordinated science infrastructure with open sharing, programmes for basic and interdisciplinary fields, and breakthroughs in core technologies through a national mobilisation approach, including application policies for first-of-their-kind equipment and materials.

Enterprises as the main body

A significant section addresses enterprises. Measures include a corporate R&D reserve fund system, a higher super-deduction ratio for enterprise R&D expenses, encouragement for small and medium-sized technology firms to increase research spending, and a route for qualifying corporate R&D projects to be elevated to national projects. Private companies with capacity are encouraged to lead major national technology tasks. The document also supports specialised, refined, distinctive and innovative SMEs.

Commercialisation

To move results into the real economy, the policy proposes pilot and demonstration programmes for new technologies and scenarios, concept-validation and pilot-testing platforms, and evaluation of projects across their whole lifecycle. Universities and research institutes are encouraged to license results to smaller firms on a use-first, pay-later basis, and large firms are encouraged to open their supply chains to smaller enterprises. Artificial intelligence is named as a tool to change research paradigms.

Industrial Priorities

Traditional industries

The policy insists the real economy remains the foundation. It supports upgrading traditional sectors — mining, metallurgy, chemicals, light industry, textiles, machinery, shipbuilding, construction — using digital, intelligent and green technologies, alongside equipment renewal, tax support for technological upgrading, and quality and brand development. Agriculture and services also receive dedicated programmes.

Emerging and future industries

Priority emerging sectors include next-generation information technology, new energy, new materials, intelligent connected new energy vehicles, robotics, biomedicine, high-end equipment and aerospace. The policy calls for distinctive regional clusters and warns against involutionary competition. It also promotes low-altitude economy and commercial space, subject to safety. Future industries named include quantum technology, biomanufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence and sixth-generation mobile communications, with mechanisms for investment growth and risk sharing.

Digital economy and AI+

The document calls for data property rights, trading and benefit-sharing rules, data pilots, national data infrastructure, and programmes including East Data West Computing, smart manufacturing and industrial internet. A dedicated AI+ initiative promotes AI adoption across traditional industries and applications such as intelligent connected vehicles, AI phones and computers, and humanoid robots. It also calls for efficient supply of computing power, algorithms and data, sector-specific pilot bases and high-value application scenarios, plus monitoring, risk warning and emergency response systems for AI safety.

Green Transition

Green manufacturing, green services and green energy are prioritised, with greener processes in key industries, incentives for green consumption, certification and labelling, and zero-carbon factories and parks. The policy proposes carbon double-control, carbon accounting and footprint systems, expansion of the national emissions trading market, a voluntary reduction market, a unified green certificate market, diversified green financial products, green procurement and tax measures, and agricultural subsidies oriented to green ecology. An energy revolution section covers orderly advanced nuclear fission, high-share renewable power systems, and international cooperation.

Institutions, Regulation and Finance

Market and regulatory reform

Reforms include demand-oriented project selection, management and evaluation, reform of job-related scientific and technological achievement rights, incentives for qualifying state-owned enterprises, and a unified national data market. On supervision, the policy proposes improving market access, strengthening antitrust and anti-unfair competition enforcement, governance in AI and biology, cross-departmental joint supervision, less on-site inspection, data-based supervision, stronger intellectual property management with punitive damages, and tax rules suited to new business forms.

Finance and talent

Financing measures include angel, venture and private equity investment, a stronger guiding role for government investment funds, policies supporting long-term capital for early-stage, small, long-horizon and hard-technology ventures, patient capital, bank loan products suited to new quality productive forces, science and technology bonds, listing support for quality technology firms, insurance covering the innovation chain, and technology leasing. On talent, the policy promotes reform of education, science and technology and talent systems, new research-oriented universities, adjusted disciplines, modern vocational education, and customised training jointly run by firms and universities.

Openness and Foreign Participation

The policy calls for allocating advanced production factors globally, expanding high-level opening, and using free trade zones to cluster domestic and foreign factors. It promotes jointly built science parks, Belt and Road joint laboratories, international advanced technology application centres and a global innovation cooperation network. Notably for foreign founders, it encourages foreign venture capital institutions and international standards organisations to develop in China, and calls for an efficient, convenient and secure mechanism for cross-border data flows.

Practical Takeaways

• Sector positioning: Technology, advanced manufacturing, digital and AI applications, green energy and future industries receive the most policy attention.
• R&D structure: A China-based R&D function may align with incentives described for enterprise research spending and project elevation.
• Financing: The policy explicitly mentions foreign venture capital institutions operating in China.
• Compliance: Expect evolving rules on data, AI governance, antitrust, IP and cross-border data transfer.
• Competition caution: The document discourages involutionary competition, which may affect pricing and expansion strategies.

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